A confidential defamation settlement paid for by the state of Western Australia after Corrective Services Minister Joe Francis labelled a senior public servant "incompetent" should be paid back to taxpayers, the opposition says.
Mr Francis made the comment at a press conference after Department of Corrective Services chief financial officer George Kessaris said in a leaked memo that he refused to sign the 2014-15 annual financial report because of wasteful spending and fiscal mismanagement.
Mr Francis says a policy from the early 1990s, detailed in guidelines for ministers and public officials involved in legal proceedings, says the state will meet costs "where the conduct ... was in good faith and reasonable, and in the discharge of official responsibilities".
But opposition corrective services spokesman Paul Papalia said the comments weren't reasonable so the minister should dig into his own pocket.
"He attacked a public servant who was just doing his job on behalf of the taxpayers, so Mr Francis should pay the bill," Mr Papalia told AAP on Wednesday.
"It was his department and a whole lot of legitimate, reasonable concerns were raised in the document.
"Tens of millions of dollars of taxpayers' money are subject to very poor management at the best and possibly failure to comply with the Financial Management Act at the worst.
"They have never been addressed."
Mr Papalia said the state government had instead shot the messenger and focused on who leaked the memo in a bid to deflect attention away from the problems, which included paying on-call and after-hours allowances to senior executives who were not entitled to them
How much the taxpayer had been slugged should be divulged, but Mr Francis said he was legally obliged to maintain the confidentiality of the settlement.
