Labor has taken aim at a regional grants program that delivered 96% of its $272m of funding to Coalition-held electorates, despite projects being selected through an open, competitive process.
Julian Hill, the chair of the parliament’s audit committee, said “the so-called Regional Growth Fund was yet another giant rorted slush fund”, delivering 16 projects in Coalition-held electorates and just one in a Labor-held seat, the Coalition target of Lingiari.
An analysis of the successful projects reveals that $261m was spent on the 16 projects in Coalition-held electorates and just $11m on the one in Lingiari.
Answers to questions on notice from the infrastructure department reveal the program delivered tens of millions to at least three projects with business cases lacking a cost-benefit ratio, including $10m to the Yarra Ranges trails in Casey, on the outskirts of Melbourne.
The same project was also funded under Victorian government schemes, the growing suburbs fund and the eastern metropolitan partnership.
The Australian National Audit Office has found that 27% of grants that were intended for regional development reported on GrantConnect “were delivered to postcodes classified as major cities of Australia”.
According to the department, all regional growth fund projects were approved by Michael McCormack, then deputy prime minister and regional development minister. Its answers note a ministerial panel also played a role selecting projects in consultation with cabinet.
The regional growth fund was set up in the 2017-18 budget, intended to support “major transformational projects”. Despite being set up before the 2019 election, almost half ($132m) of its budget was spent in 2022-23.
The Liberal-held seat of Forrest received two grants, of $13m for the Busselton jetty village, an “underwater discovery centre”, and $10.35m for the Busselton entertainment, arts and culture hub.
In the South Australian electorate of Barker, the Mount Gambier sport and recreation centre received $15m from the federal government.
Hill said under the regional growth fund, “if you weren’t in a Liberal or National seat, you didn’t get a look in”.
“They treated taxpayer funds as Liberal party funds, yet their government was so rotten to the core they still don’t seem to get what they did was wrong,” he told Guardian Australia.
In response, McCormack told Guardian Australia that “'program decision processes followed the publicly advertised guidelines and decisions were approved by cabinet”.
“The Coalition held and holds more seats in regional areas. Each elected Government can create programs to deliver funding to areas of need and in establishing the regional growth fund, then minister Fiona Nash felt she was addressing the needs of eligible communities.”
McCormack queried why Labor “doesn’t move on and do something rather than worry about something we did – they’re in government now”.
“All of those [grants] were doing what the program was called – growing the regions,” he said.
McCormack noted that some regional grants programs were designed to deliver election commitments, likening them to Labor’s blackspot program, which the opposition has criticised for disproportionately benefiting Labor seats.
But the regional growth fund was designed as an open, competitive process – not to deliver projects selected through election commitments.
The regional growth fund is one of a string of programs cancelled by the Albanese Labor government and replaced by $1bn over three years for competitive grants in the growing regions, regional precincts and partnerships programs.
These included the controversial $1.15bn building better regions fund, which the audit office found resulted in Coalition seats receiving twice as many grants as Labor electorates.
But two new Labor programs, announced in the October budget, will be delivered through closed grants: $1bn over five years for the priority community infrastructure program and $350m over five years to deliver small-scale community, sport and infrastructure projects.
In March the audit committee revealed that the Morrison government’s urban congestion fund allocated 83% of its projects – worth almost $3bn – to Liberal-held seats.
On Friday the audit committee will hold a hearing as part of its ongoing inquiry into grants administration.
