Regional fund gaps spotted
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An audit has exposed failures in a major regional grants program.
The Australian National Audit Office (ANAO) has criticised the Growing Regions Program (GRP), a $600 million initiative for regional infrastructure, highlighting significant failures in governance, transparency, and implementation.
The program’s first funding round, despite being described as “largely effective”, awarded only $207 million across 40 projects - well below its $300 million budget - and faced serious questions about fairness and process.
Introduced in May 2023, the GRP aimed to address infrastructure gaps and promote regional development through a competitive grants process. However, the audit finds that the program’s first round was undermined by unclear eligibility criteria, inconsistent assessments, and unauthorised administrative changes.
While 650 Expressions of Interest (EOIs) were submitted, requesting $2.7 billion in funding, flaws in the assessment process led to many suitable projects missing out on funding.
The ANAO’s audit found that the Department of Infrastructure’s administration of the program deviated from published guidelines.
Notably, the Business Grants Hub, tasked with assessing EOIs, faced vague eligibility criteria.
Applications for projects such as hospitals and aged care facilities, typically funded by other programs, advanced through the merit stage.
Following ministerial intervention, 163 initially ineligible applicants were allowed to resubmit, with 58 approved after reassessment. This move directly contradicted the program’s rules and added further inconsistencies.
The multi-party parliamentary panel, tasked with assessing regional priorities, also encountered difficulties.
Panel members struggled with undefined terms like “regional priorities” and adopted inconsistent scoring methods.
Midway through the process, the panel reduced workloads by requiring only three members to score each application, further compromising fairness.
The ANAO highlighted these adjustments as a significant failure in the program’s design.
In a move not outlined in the original guidelines, the Department of Infrastructure added a geographic assessment in the second stage to achieve equitable funding distribution across states.
This led to three highly ranked projects being removed from the merit list and seven lower-ranked projects being added, raising questions about adherence to merit-based principles.
Legal uncertainty further complicated the program.
The Australian Government Solicitor warned that aspects of the program lacked lawful authority, prompting a shift to a Federation Funding Agreement with states and territories. While this mitigated legal risks, it caused delays in announcing successful projects and left recipients uncertain about funding timelines.
Despite these issues, the Minister for Infrastructure approved funding for 40 projects, all of which had been assessed as highly suitable or suitable.
However, 14 projects recommended by the department were rejected, with the minister suggesting they were better suited to other funding portfolios such as health, housing, or disability services.
The ANAO recommends clearer guidelines to ensure eligibility aligns with policy intent and greater adherence to transparent processes.
The Department of Infrastructure has pledged improvements for Round 2, including updated guidelines, but also sought to downplay the audit’s findings by attributing challenges to external factors.
Minister for Infrastructure Catherine King says the Government welcomes the report’s findings and recommendations for improvement.
“We will review the report in detail and continue to use the ANAO’s work to inform future rounds and future programs,” she said.