Premier Annastacia Palaszczuk pledged $25 million to upgrade the city's main rugby leage venue Browne Park on Thursday.

However less than a fortnight ago, One Nation leader Pauline Hanson announced $23 million for the proposed rival Rocky Sports Club stadium on behalf of the federal government.

Rockhampton and the surrounding electorates of Keppel and Mirani are a key battleground between Labor and One Nation in the October 31 state election race.

The premier says the state funding will add 4000 seats to Browne Park, which will give the arena 12,000 seats and make it eligible to host NRL, AFL, Super Rugby and A-League matches.

"This is something the community is passionate about, I'm passionate about and we want to see that stage one happen," Ms Palaszczuk said on Thursday.

Senator Hanson unveiled the federal grant alongside Liberal National Party MP and Northern Australia Minister Michelle Landry on September 14.

Queensland Treasurer Cameron Dick slammed the initiative, saying the Rocky Sports Club site was a low-lying rubbish dump.

"Why the federal government thinks it's good to spend money, a very significant amount of taxpayer money on a football oval that gets flooded is beyond me," he said.

Attendees at Rocky Sports Club funding announcement said the One Nation leader spoke first, followed by Ms Landry, with local Liberal National Party candidate Tony Hopkins also involved.

However the sitting state Labor MP for Rockhampton Barry O'Rourke wasn't invited.

"I also don't understand why Scott Morrison thinks it's good enough to give that cheque to Pauline Hanson," Mr Dick said.

"If you give money to Pauline Hanson and One Nation that's what you get, a bad outcome for the community."

Labor Senator Murray Watt has asked the Australian National Audit Office to investigate the conduct of federal Sports Minister Richard Colbeck and Infrastructure Minister Michael McCormack in awarding the grant.

The auditor-general has also been asked to probe the assessment process.

"This request is under consideration and the response will be published," the auditor-general said in a statement on Tuesday.

Labor and One Nation are fighting for central Queensland votes ahead of the state election.

The seat of Rockhampton is held by Mr O'Rourke by a margin of just 5.2 per cent and Brittiny Lauga holds nearby Keppel by a slim 3.1 per cent.

Meanwhile One Nation's only state MP Steven Andrew holds Mirani by 4.8 per cent.

Australian Associated Press