NSW Premier Gladys Berejiklian is "shocked and distressed" over sexual violence allegations which surfaced against the Disability Services Minister Gareth Ward on Thursday, prompting him to step aside from the party room.
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The Kiama MP stepped aside after news emerged he was being investigated for "sexual violence-related offences" dating back eight years. He denied any wrongdoing and said he had not yet spoken with police.
Mr Ward is the second MP in as many months to step down over sexual assault allegations, while his move to the cross bench has the NSW government in minority.
"Given there was speculation, even though he hasn't been contacted by police, I think he has absolutely done the right thing in standing aside in the party room," Ms Berejiklian said.
"If any allegations of that nature are exposed, that is extremely concerning. All of us always want to see justice done and none of us will tolerate behaviour that is regarded as completely unacceptable."
Police confirmed on Thursday they are investigating the allegations against Mr Ward, which reportedly took place in 2013.
Ms Berejiklian didn't feel it necessary at this stage for Mr Ward to resign altogether as the "extent of the facts are unknown" but was "disappointed" by the situation.
"I'm shocked and distressed by what unfolded yesterday," she said. "It's disappointing ... but as all disappointments with life or with work you dust yourself off, pick yourself up and keep going."
In a statement on Thursday night Mr Ward denied any wrongdoing, and said he had not been contacted by police.
"Today I have been made aware by a journalist of an investigation into me by NSW Police," he said in a statement.
"I have not been contacted by police in relation to any allegations.
"I deny any wrongdoing."
Mr Ward said he would step down as Minister for Families, Communities and Disability Services and remove himself from the Liberal party room while the investigation is ongoing.
Deputy Premier John Barilaro said it was "Groundhog Day" for the Coalition, after another government MP quit Parliament amid sexual assault allegations earlier this year.
Upper Hunter Nationals MP Michael Johnsen resigned in March over allegations he raped a sex worker in 2019, which he vigorously denies.
Mr Ward's move to the cross bench means the Coalition government is three MPs short of a majority, with former sports minister John Sidoti also sidelined amid a corruption inquiry.
It also comes as sexual harassment and bullying policies for NSW government ministers' offices face an overhaul after a "brutal" review two weeks ago found they were ineffective and unclear.
- with AAP
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