Federal Liberal candidate Warren Mundine says he'll step down next week as chairman of a firm which is the preferred tenderer for government indigenous employment services.
A Senate estimates committee hearing in Canberra was told Mr Mundine - the Liberal candidate for the NSW seat of Gilmore - chairs RISE Ventures, a successful employment service which covers many remote areas of the country.
During the hearing, where Labor quizzed minister Nigel Scullion over the matter, a note was passed to a senior official confirming Mr Mundine had agreed to resign from the position on February 25.
The official, Ray Griggs, told the hearing there was an "absolute perception of conflict of interest".
"Whether it's a real conflict is another matter," he said.
Labor senator Jenny McAllister also sought answers on why Mr Mundine had last year been granted $200,000 to produce a Sky News television show, Mundine Means Business.
Department of Prime Minister and Cabinet official Clare Sharp told the committee Mr Mundine had approached Senator Scullion about the program idea.
But Senator Scullion said he could not recall the genesis of the idea.
Senator McAllister said the problem was clear.
"What has actually taken place is that a person who was known to be very close to the prime minister - is sitting on the prime minister's indigenous advisory council - receives a direct grant which no other person was able to apply for to develop a television program to raise his profile," she said.
"And then that person nominates as a candidate for the Liberal Party."
Senator Scullion said the program had gone ahead because Mr Mundine is "a high profile, very articulate, very smart, Aboriginal man who is providing leadership in this area".
He said it would not have been possible to know last year that Mr Mundine, a former Labor Party national president, "would somehow end up on our side of politics".
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