McCormack under fire over regional grants fund

'Industrial scale rorting': McCormack under fire over regional grants fund

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Deputy Prime Minister Michael McCormack Picture: Sitthixay Ditthavong

Deputy Prime Minister Michael McCormack Picture: Sitthixay Ditthavong

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Labor has accused the Morrison government of "rorting on a industrial scale" over the awarding of funding in a regional grants program

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Labor has accused the Morrison government of "rorting on an industrial scale" after it was revealed a panel of ministers rejected departmental advice in approving millions of dollars worth of regional projects on the eve of the last federal election.

But the office of Deputy Prime Minister Michael McCormack, who chaired the panel, has pushed back against the accusations, pointing out that all of the successful projects were assessed as eligible and worthy.

Mr McCormack's spokesman also defended the intervention of ministers in the grants process, arguing governments were elected to make decisions and it was "entirely appropriate" for the panel and cabinet to have the final say.

Newly published documents showed that 112 of the 330 projects chosen under the third round of the Building Better Regions Fund were picked against the recommendation of department officials.

The names of the other panel members were redacted from the documents, which ABC 7.30 obtained under freedom of information laws.

Under Commonwealth grant rules, ministers must report to the finance minister in instances where they approve funding despite officials advising against it. They must also disclose cases in which they've ticked off on money for their electorate.

Mr McCormack wrote to then Finance Minister Mathias Cormann on April 3, 2019 - eight days before Scott Morrison called the 2019 federal election - to inform him of funding decision for the latest round of the regional grants program.

The letter confirmed the panel had selected 112 projects against the department's advice. Mr McCormack noted that the panel had taken into account a range of factors, which were set out in the program's guidelines, before making the decision.

The "regional spread" of projects relative to current and previous government investments was a "key factor" in the selection process, the letter stated.

The projects also addressed key infrastructure priorities and "impact on their local community in a unique way".

Mr McCormack pointed out that although not recommended by the department, all of the projects had been assessed as "value for relevant money".

Labor's infrastructure, transport and regional development spokeswoman Catherine King accused the Morrison government of "rorting" the regional grants fund, as she said it had done during the so-called "sports rorts" affair.

"This is now rorting on an industrial scale," she said.

"There isn't a taxpayer funded program that this government won't use for its own electoral advantage."

In a statement to ,Mr McCormack's spokesman said the fund was an "open, competitive and merit-based program", with applications assessed against "robust" guidelines to ensure the most worthy projects received support.

"The department provides recommendations on which projects to fund to the ministerial panel, which in consultation with cabinet makes the final decision and may consider other factors including the spread of projects, funding across regions and the regional impact of each project," the spokesman said.

"Not a single project that was 'not recommended' by the department received approval. All projects approved were assessed by the business grants hub as eligible and representing value with relevant money."

The spokesman said the four rounds of the program had been "oversubscribed", with 3235 applications seeking a combined $4.5 billion vying for a slice of the $841 million on offer.

The government has supported 995 of those projects.

"These projects have delivered or upgraded lasting infrastructure including regional airports, sporting precincts, cinemas, art galleries, museums, health facilities and bike trails across the country," he said.

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