Canberra bureaucrats are in the opposition's firing line after the federal government signalled the public service would grow while announcing it would cut a key regional infrastructure fund.
A key billion-dollar Coalition grants program for the regions was scrapped on Monday as the Labor government looks for savings in its budget to be revealed on Tuesday.
The infrastructure program was the subject of a scathing audit by the federal watchdog, which determined funding decisions were skewed toward Coalition-held seats and departmental recommendations were ignored.
Nationals leader David Littleproud defended his colleagues against the findings, adding public servants in the nation's capital knew "three-fifths of bugger all" about what was needed in the regions.
The audit report, released in July, found 65 per cent of nearly 1300 projects awarded funding were not put forward by the Infrastructure Department as the "most meritorious".
A ministerial panel, which consisted of Coalition members and made decisions on where the funding should go, was also found to have increasingly relied upon "other factors" in the decision-making progress, inconsistent with departmental advice.
Mr Littleproud, who sat on two of the ministerial panels, said his colleagues knew better about what was happening on the ground in the regions than public servants in Canberra.
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"Just because a bureaucrat in Canberra thought a priority in one part of the nation was more important than another - we didn't think [that] was the right way to decide how ... that money should be distributed," he said on Monday.
"I don't want a bureaucrat telling me what should happen in Thargomindah compared to what's happening in Roma.
"With all due respect, [bureaucrats are] great people but they know three-fifths of bugger all outside this place.
"I don't have a lot of confidence in them telling us how ... we should administer money."
A key billion-dollar Coalition grants program for the regions has been scrapped by the Labor government following a series of "pork-barrelling" controversies revealed by the federal watchdog.
Two new regional grants programs will instead be funded over the coming three years as Infrastructure Minister Catherine King promises to "restore integrity" to funding processes.
But the opposition has hit back at the federal government's claims, saying it's "hardly startling" money went to National-held seats in the regions and that ministers knew better than Canberra bureaucrats.
The Australian National Audit Office released a damning report in July showing almost two-thirds of grants given from the Building Better Regions Fund, a $1 billion regional infrastructure program, were against department recommendations.
Ms King announced the sixth round of the grants program would not go ahead and instead be replaced by the Growing Regions and Precincts and Partnerships program, which focuses on delivering for regional and rural communities.
She also dismissed criticism from the National Party, which signed off on many of the funding decisions, pointing to the audit office's findings.
"Despite all the evidence, the National Party continues to defend the fund and, what is worse, tries to tell people their applications were funded under round six of the [fund]," Ms King said.
"What they are defending are decisions to preference their own electorates, to ignore anything resembling proper process and in some cases hand out funds to people who never applied and didn't know they had got the money."
The Labor frontbencher said the Community Development Grants program, which was a closed program based on a 2013 election promise, would also be cut.
Nationals leader David Littleproud dismissed claims the funds were regional "rorts".
"It is incredibly hypocritical of Labor to accuse the Nationals of pork-barrelling when we already know this budget is all about helping the re-election campaign of Victorian Premier Dan Andrews," he said.
"It's hardly startling that most of the money for a regional program went to Nationals-held seats. It's a regional fund and we are the party that represents regional Australia."
The audit office's report into the former Coalition government's Building Better Regions Fund has revealed 65 per cent of 1293 projects awarded funding were not put forward by the Infrastructure Department as the "most meritorious".
The use of a ministerial panel, which consisted of Coalition members, was found to have increasingly relied upon "other factors" in the decision-making progress, inconsistent with departmental advice.
Mr Littleproud, who sat on two of the ministerial panels, said his colleagues knew better about what was happening on the ground in the regions than public servants in Canberra.
"Just because a bureaucrat in Canberra thought a priority in one part of the nation was more important than another - we didn't think [that] was the right way to decide how ... that money should be distributed," he said on Monday.
"I don't want a bureaucrat telling me what should happen in Thargomindah compared to what's happening in Roma.
"With all due respect, [bureaucrats are] great people but they know three-fifths of bugger all outside this place."
The Auditor-General found the overall program's awarding of grants, which was overseen by former Coalition infrastructure minister Michael McCormack, was "partly consistent" with the guidelines.
But the report also noted "an increasing disconnect" between the assessments put forward by the department and the grants issued by the minister as the program progressed through the five rounds.
The oversight office said record-keeping of those decisions had been "inadequate".
Mr McCormack responded to the audit's report, saying all grants had been awarded in line with the guidelines.
Seats held by the Nationals got $104 million more - 29 per cent - than if the merit processes had been relied upon and rural seats fared between 3 and 16 per cent worse off under the ministerial panel decisions.
