The Prime Minister has ordered Australia Post boss Christine Holgate to step aside while an investigation is conducted into the purchase of $12,000 worth of Cartier watches.

The luxury timepieces were given to four executives as a reward for the long hours put into closing a deal with the banks.

During Senate estimates, Ms Holgate defended the purchase, saying “I have not used taxpayers’ money. We are a commercial organisation. We do not receive government funding,”

But Labor Senator Kimberley Kitching – who was questioning Ms Holgate when the extravagant purchase was revealed – says it’s the latest example of “a litany of profligacy” at Australia Post.

“Today has just been another example of an organisation that is beloved by Australians but has really lost its way,” Senator Kitching told Brooke Corte.

In response to Ms Holgate saying she had not used taxpayer’s money to purchase the designer watches, Senator Kitching says “that gave us a real insight into her thinking and an insight into why this organisation has had this litany of extravagance,”

Click play to hear the full interview: