Palaszczuk, her chief of staff, and $267,500

Palaszczuk admits knowing the Labor government bought $267,500 in shares in company part-owned by her chief of staff.

David Barbagallo, is questioned during estimate hearings yesterday. Picture: AAP

Queensland Premier Annastacia Palaszczuk has admitted being told last year that her Labor government had bought $267,500 worth of shares in a company part-owned and directed by her chief of staff, David Barbagallo.

The link to Mr Barbagallo, a long-time Labor figure, was only made public yesterday, despite ­requiring secret declarations and integrity advice at the time.

After the controversy erupted in a parliamentary hearing yesterday Ms Palaszczuk agreed to audit the arrangements.

Mr Barbagallo and his wife, Land Court judge Fleur Kingham, own more than $300,000 worth of shares in Fortress Capstone, which developed the CruiseTraka app.

The Australian can reveal the government’s then-chief entrepreneur, Shark Tank presenter and tech investor Steve Baxter, also had an indirect shareholding in the company when the government’s Business Development Fund bought a stake in February last year. He is the director of a family company that invested.

The app is being spruiked as a “smart phone-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”.

Ms Palaszczuk hired Mr Barbagallo as her chief of staff on May 12, 2017. Her office said Mr Barbagallo distanced himself from the ­application to the fund when he took the job, and later ­declared it on his register of interests.

The application was lodged in mid-2017, when Mr Barbagallo was Ms Palaszczuk’s most senior adviser.

“There is no conflict of interest. Investments are made independently of government,” a spokesman for Ms Palaszczuk said.

An independent panel of ­experts — appointed by the state government — makes decisions about which start-ups receive ­investment from the $80 million fund. Ms Palaszczuk’s spokesman said the panel was aware “of the directors and shareholders”.

Ms Palaszczuk’s office yesterday declined to release Mr Barbagallo’s register of interests. A spokesman said Mr Barbagallo had sought Integrity Commissioner advice after he learned of the fund’s investment.

When confronted by opposition questions about the investment at budget estimates yesterday, Ms Palaszczuk initially appeared unaware of it, and had to take the questions on notice.

She later said Mr Barbagallo, a former senior adviser to Labor premier Wayne Goss, had advised her last year of the investment.

“Everybody needs to abide by the rules … there has been no ministerial decision around it, it’s done independently,” Ms Palaszczuk said.

“And I’m sure the chief of staff took every step to ensure all matters are above-board. Now that you’ve raised the issue, I’m happy to do an audit to ensure all processes are followed.”

Ms Palaszczuk said her parliament’s director-general would conduct the audit.

Opposition Leader Deb Frecklington described the revelations as another “integrity scandal” to hit the Palaszczuk government and said Queenslanders deserved to know why the investment had been made.

“Now we have a company owned by the Premier’s chief of staff receiving a cheque for $267,500 from the Queensland Treasury,” Ms Frecklington said.

“This grant does not pass the pub test. It doesn’t pass any integrity test.”

“Queenslanders have a right to know why the Palaszczuk Labor government wrote a six-figure cheque for David Barbagallo’s business.

“What integrity tests were ­applied — if any — and what happened to the money?”

In answer to opposition questions about the Business Development Fund last year, Treasurer Jackie Trad included Fortress Capstone on a list of beneficiaries tabled in parliament. She described the fund as a “fantastic ­example of our partnership with the private sector to grow jobs and opportunities for Queenslanders, now and into the future”.

Mr Barbagallo is regarded as a “political fixer” who was appointed to lead Ms Palaszczuk’s office before the last election. He served as Mr Goss’s principal private secretary between 1991 and 1993, ­before embarking on a career in information technology.

Mr Barbagallo was embroiled in a peculiarly Queensland scandal, known as the Cape Melville incident or the Foxtail Palm affair, in the early 1990s, before being cleared of wrongdoing.

He was also named in the 2001 Shepherdson Inquiry into historical electoral fraud in Queensland Labor, admitting in the Criminal Justice Commission witness box that he had organised a scheme to falsely enrol people in the South Brisbane electorate before a 1986 Labor preselection plebiscite. In 2002, he was fined $1000 over the enrolment scheme.