The Defence Department has launched an investigation into the leaking of documents relating to Defence Minister David Johnston's travel and hospitality expenses.

News Limited published receipts it claimed showed the Minister and his chief of staff recently spent thousands of dollars wining and dining industry players seeking government contracts.

The reports claim Senator Johnston used taxpayers' money to pay for expensive meals with the chairman of government-owned shipbuilder ASC, Bruce Carter, and Andrew Bellamy, the head of West Australian shipbuilder Austal.

A spokesman for Senator Johnston said Defence was investigating the leaks.

"All hospitality hosted by the Defence Minister and extended to foreign dignitaries or industry heads, including at the time of the Albany Commemoration, has been within guidelines and is consistent with previous defence ministers' practice," he said.

Senator Johnston defended his chief of staff, Sean Costello, saying: "Mr Costello is one of the most capable people I have ever had the privilege to work with.

"He brings a wealth of experience from the private sector, has served in the Royal Australian Navy as a submarine officer, and the Howard government as a senior adviser."

The Opposition's Nick Champion says it is the latest in a string of embarrassments for Senator Johnston.

"It's up to Tony Abbott really, to do what we all know needs to be done," Mr Champion said.

"We all know it's going to be done. This minister is either going to be demoted, shifted out of his portfolio or sacked completely and put on the backbench."

Meanwhile, Fairfax has reported two staff have been shown the door from the Minister's office.

However, it said no accusations relating to the leak were made against the two staff members.

The reports come in the wake of the Government's decision to boost Australian Defence Force wages by just 1.5 per cent a year, and Senator Johnston's criticism of ASC.

Last week he said he would not trust ASC to build a canoe, but after widespread criticism, including from within the Government, Senator Johnston said he regretted if the remarks caused offence.