Sources with knowledge of a discussion between the premier and Transport Minister David Elliott earlier this year confirmed Perrottet described Cartwright, the former boss of lobby group Business NSW, as “a problem”.

Perrottet on Tuesday told parliament Cartwright’s expenses were being examined by newly-minted Trade Minister Alister Henskens.

In a statement on Tuesday evening, Henskens said he had been advised that all approved expenses incurred by Cartwright complied with government policies.

Henskens has taken over the trade portfolio from Stuart Ayres, who was dumped amid concerns over his role in the Barilaro controversy. Ayres, who has denied any wrongdoing, was also replaced as deputy Liberal leader by Treasurer Matt Kean during a party room meeting on Tuesday.

Announcing Kean’s appointment, the premier said his government was building on its track record and “looking to the future”.

“We’ve had a unanimous decision and I think the sense in the party room today was incredibly strong, the entire party room coming together in supporting Matt Kean.”

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Appearing before the parliamentary inquiry probing his appointment to the New York role, Barilaro on Monday said he wished he had never applied, but that none of his senior colleagues ever raised any concerns.

Barilaro informed Perrottet, Kean and Ayres of his intention to apply for the $500,000-a-year role.

Perrottet on Tuesday said hindsight allowed him to see the recruitment for the position was clearly “flawed” and “problematic”, conceding regret for encouraging his former colleague to pursue the opportunity last year.

“If I had my time again, I would have asked him not to,” the premier said on Tuesday. “If everyone knew what they knew now about the process, I mean, the whole situation has been incredibly disappointing for everybody who has been involved.“

Barilaro told the inquiry he first spoke to Perrottet about his plan to apply for the job one month after announcing his intention to resign last year, while he was still an MP. He said the premier responded: “Great.”

Perrottet on Tuesday said it was a passing comment and “not a substantive discussion”, insisting he was not aware of the problems that have since emerged relating to the recruitment.

“I am there to encourage people, and I was not aware of the flaws in this process,” he said.

Barilaro will return for a second day of evidence on Friday, when the committee will introduce evidence relating to his staff member-turned-girlfriend Jennifer Lugsdin, for whom he helped secure a job at Investment NSW.

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Perrottet is awaiting the findings of an independent review of the process, which is being completed by former public service commissioner Graeme Head.

He has also recommended that Governor Margaret Beazley appoint high-profile silk Bruce McClintock, SC, to conduct a legal review into whether Ayres breached the ministerial code of conduct in his involvement with the Barilaro appointment.

The premier said the findings of the McClintock review will be made public once it is completed.

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