The NSW Premier says he was “horrified” and “disgusted” by an explicit photo scandal that has rocked the government this week.

“When that situation occurred years ago, I was appalled, horrified and disgusted,” Premier Dominic Perrottet told reporters on Saturday.

Major damage was inflicted on the Coalition government’s already stuttering campaign on Friday as Liberal MLC Peter Poulos resigned from his parliamentary secretary role after apologising for sharing 1980s Penthouse images of a female rival during a preselection battle five years ago.

The Premier said he now expects the NSW Liberal Party to act on the incident, signalling the MP’s future in the party could be in doubt.

The incident caused the female MP distress at the time, Mr Perrottet said.

‘No place for that behaviour’

“I expect the highest standards amongst my parliamentary colleagues.

“Peter has apologised, as he should have. There is no place for that behaviour in any workplace. I have made that very clear.

“Peter has resigned his parliamentary secretary role. That is the appropriate course of action.

“I expect the NSW Liberal Party to act appropriately as well.”

The Premier’s sharpened language comes after he appeared to equivocate with the upper house MP earlier this week, saying Mr Poulos had offered a heartfelt apology over the incident.

“People make mistakes. No one is perfect. I’ve made a number of mistakes in life,” the Premier told reporters on Wednesday.

Mr Perrottet’s harder attitude was backed by Treasurer Matt Kean.

“This is disrespect. I don’t think there’s any role for disrespect in workplaces or anywhere across our community,” Mr Kean told reporters in North Sydney on Saturday.

“I’m very disappointed that this occurred.”

Second resignation

The government was soon caught in a second scandal, as finance and employee relations minister Damien Tudehope resigned from his portfolio after declaring he owned shares in toll road owner Transurban.

Asked if the Liberal Party was in disarray, Mr Kean insisted the party was focused on delivering for families.

Mr Kean said Mr Poulos had been working for him when the images were sent, around 2017 or 2018. He said the emails were not sent to him.

The images were sent from a private email address outside work hours, he added.

‘No place for disrespect’

“It doesn’t matter whether it happened in someone’s private capacity or not,” Mr Kean said.

“There is no place for disrespect anywhere across our community. That’s my very strong view.”

Mr Poulos’ future in the Liberal Party would ultimately be a party matter, the Treasurer said.

It comes after Mr Tudehope, the government’s leader in the upper house, resigned from his portfolios late on Friday after telling reporters he had discovered he owned shares in Transurban.

The company, which operates most of Sydney’s toll roads, reported record half-year earnings of $1.66 billion recently, having collected $835 million from Sydney drivers in six months.

“The events of the last 24 hours have provided an unnecessary distraction for the government at a time when the most important thing for the people of NSW is to be concentrating on the choice before them,” Mr Tudehope said.

Premier Dominic Perrottet accepted Mr Tudehope’s resignation, adding he had been cleared of legal wrongdoing by the government’s lawyers.

Labor candidate quits

On the Labor side, former Canberra Raiders star Terry Campese left the race for the state seat of Monaro, previously held by ex-Nationals leader John Barilaro.

Mr Campese’s exit came after weeks of media attention, including over a scandalous party and how he came to be selected as a candidate.

“(I will stand down) not because my heart isn’t in it but because I love this community too much to drag it through the media – whether they are truthful or not,” Mr Campese said.

On Saturday, the coalition pledged $1.5 billion to set up a Clean Energy Superpower Fund to invest in renewables and boost the state’s transition from fossil fuels.

Meanwhile, Labor pledged $13 million in the coming four years to deliver another 50 police officers to south west Sydney, to tackle escalating crime.

-AAP