Mr English told reporters this afternoon he did not believe he had ever spent $1000 on a taxi, but he could understand how such a fee could be charged.
"As a minister I can easily imagine circumstances where that may be better than staying the night, it might be better than hiring some other car services ... or using the High Commission's car or whatever."
Mr English said he was not concerned about the cost, which was incurred during Mr Joyce's one-day trip to the Australian Jobs Fair in November.
"[Mr Joyce]'s a hard-working, effective minister with whom it's worth spending taxpayers' dollars to have him advocating New Zealand's economic interests," he said.
Asked whether public servants would get away with the same spending, Mr English said: "Well, I'm not there to make sure they do whatever they do. This is transparency, I'm sure that if you talked to Mr Joyce he can explain the situation.
"All I'm saying is that incurring a bit of expenditure .... in him advocating New Zealand's economic interests is well worth it."
Mr Joyce, who has just returned from South America, said in a statement: "Using this sort of car is cost-effective in terms of achieving the maximum amount in the shortest possible time."
He said he always looked to be careful with the use of taxpayers' money when carrying out his ministerial duties.
Mr Joyce's office said the minister hired the car for nine hours during the visit, which included around five stops, three media interviews and a meeting at the National Innovation Centre in Sydney.
A spokeswoman clarified that the minister did not leave the taxi meter running. It was hired at a rate of $110/hour by the Ministry of Foreign Affairs and Trade, which the spokeswoman said was a similar rate to using a Crown limo.
The minister also saved money by making a day trip to Australia and not staying in a hotel.
"His day started in Auckland at 4am and finished in Wellington at 11pm," his spokeswoman said.
Mfat has previously arranged to borrow Commonwealth Cars from the Australian Government, but this service was withdrawn for New Zealand ministers last year.
Earlier today, the Taxpayers' Union said Mr Joyce should refund the cost of the taxi fare.
"Ministers are supposed to be stewards of taxpayer money," executive director Jordan Williams said.
"To put this in perspective, it would have been cheaper for taxpayers had Mr Joyce flown his office intern to Australia and got them to drive a rental."
- Isaac Davison of the New Zealand Herald
