Queensland Premier Steven Miles says it was a mistake appointing a former top bureaucrat to lead a review barely a month after she had left with a government payout.
Former director-general Rachel Hunter was on Thursday unveiled as the head of a review into the state's response to homelessness.
Her appointment came just weeks after she left the government with a payout - reportedly worth almost $400,000 - following the resignation of premier Annastacia Palaszczuk.
Mr Miles on Friday conceded it was not a good look but said at the time he did not consider Ms Hunter's recruitment as "jobs for mates".
"I didn't see it that way when we discussed it but maybe I should have and I acknowledge it," he told reporters.
Mr Miles said Housing Minister Meaghan Scanlon had suggested Ms Hunter lead the review and he "took her advice".
"I'm willing to acknowledge that at some stage during that process, I should have realised that it wasn't going to be a good look," he said.
"And we should have either clarified sooner that it would be pro bono, or identified someone else who could do that review.
"So that's a mistake that I've made. We're doing a lot and sometimes we'll make mistakes and when I do, I will acknowledge it."
The premier said Ms Hunter offered to undertake the review without payment once he realised the appointment may come under fire.
"When concerns were raised with me, I immediately saw the merit in those concerns and contacted Ms Hunter," he said.
"She immediately offered to do it pro bono.
"What I can tell you is throughout that entire process, my motives, my intentions, were to make sure that we have the best system to support homeless Queenslanders."
The review led by Ms Hunter was announced along with a $390 million funding boost to the state's homelessness sector on Thursday.
Specialist homelessness services across Queensland are set to receive a 20 per cent increase - or extra $72 million - in funding over the next 18 months, as part of a new housing plan.
The announcement came just days after it was revealed southeast Queensland was "ground zero" for Australia's cost of living crisis.
A Queensland Council of Social Services study said Brisbane led the nation in rent, energy, insurance and health price hikes.
