Premier says staffer who received $267k grant has her support

Premier Annastacia Palaszczuk has thrown her support behind her chief of staff after it was revealed a company he part-owned received state government funding.

The Palaszczuk government made a $267,500 Advance Queensland business development investment in Fortress Capstone Pty Ltd in 2017-18 for the development of an app called CruiseTraka.

Premier Annastacia Palaszczuk with her chief-of-staff David Barbagallo at estimates this week.Credit: Jono Searle/AAP

An ASIC search reveals Mr Barbagallo has been a director of Fortress Capstone since 2007, and holds a stake in its shares with his wife.

Speaking in Rockhampton, Ms Palaszczuk said her chief of staff had her support.

"He has assured me ... that everything has taken place in terms of the obligations that he had to do and I've asked my director-general to do an audit," she said.

"So I won't be commenting any further until that audit's done."

A Queensland government spokesman said initial conversations about the application for funding began in 2017, before Mr Barbagallo was hired as Ms Palaszczuk's chief of staff in May 2017.

The full application was made after Mr Barbagallo was hired.

However, he insisted Mr Barbagallo "removed himself from the application process as soon as he was employed by the Premier".

"The investment is in the company, of which the chief of staff is one of approximately 20 shareholders," the spokesman said.

"Just like when a private entity invests in another private company, it is not a grant or a loan - it is an investment which results in a share of the company and the profits the company makes."

On Tuesday, Ms Palaszczuk said funding decisions were made by an independent panel, with no government or ministerial input, and the company was declared on Mr Barbagallo's pecuniary interests register.

LNP deputy leader Tim Mander criticised Ms Palaszczuk's decision to ask her director-general to audit the awarding of the "co-investment fund" to the company.

Mr Mander called for the independent auditor-general to investigate the issue instead.

"The opposition does not think it's appropriate that somebody so close to the Premier, somebody internal, would do this investigation," he said.

Mr Mander said Mr Barbagallo should have withdrawn his interest in the company after landing the job in Ms Palaszczuk's office.

"I don't think anybody in a position of influence, so close to the Premier, should be applying for government grants, it's inappropriate," he said.

CruiseTraka is described as a "smartphone-based solution used by passengers to share their cruise experience with family and friends back home in almost real time via social media and email".

Mr Barbagallo is a well-known Labor figure and regarded as a political head kicker.

In 1990, he became IT adviser and later chief of staff to then-Queensland premier Wayne Goss and became embroiled in a long-running electoral rorting scandal that was investigated by the Shepherdson inquiry.

Mr Barbagallo was fined $1000 over the enrolment saga.

The revelations came after controversy over Deputy Premier Jackie Trad's purchase of a Woolloongabba property.

Ms Palaszczuk insisted her government did not have an "integrity problem".

"We're really tough when it comes to rules around transparency and integrity," she said.

"In fact, one of the very first legislation that my government brought in was reducing the donation disclosures from $12,000 down to $1000."