Regulating the Rorts: The Legal Governance of Grants Programs in Australia
| Published date | 01 June 2023 |
| DOI | http://doi.org/10.1177/0067205X231166704 |
| Author | Yee-Fui Ng |
| Date | 01 June 2023 |
| Subject Matter | Articles |
Article
Federal Law Review
2023, Vol. 51(2) 205–231
© The Author(s) 2023
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DOI: 10.1177/0067205X231166704
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Regulating the Rorts: The Legal
Governance of Grants Programs in
Australia
Yee-Fui Ng*
Abstract
Numerous recent scandals have surfaced relating to the Australian government allegedly engaging in
‘pork barrelling’, that is, the partisan channelling of grants funding to government electora tes,
instead of merit-based allocation. Yet the probity of the use of public money is crucial towards
preserving public trust in Australian democratic institutions. This article will critically analyse the
legal accountability mechanisms for grants funding through public finance legislation, ‘soft law’such
as grants, guidelines and ministerial standards, and the availability of legal redress. It will also examine
political accountability mechanisms, including the operation of parliamentary committees, the
Auditor-General and the Ombudsman. The author argues that although political regulation
provides transparency in the government’s use of public funds, it remains ineffective to combat the
government’s deeply entrenched incentives to allocate grants in a partisan manner. As such, it is
contended that stronger legal accountability in terms of enforceable rules and regulations is re -
quired to reform grants regulation towards improving the probity and accountability of the use of
public funding.
Accepted 4 August 2022
I Introduction
The Australian Government provides billions of dollars’worth of grants annually to a wide range of
stakeholders in numerous policy areas, including social services, business support, emergency
relief, and research and innovation.
1
In 2021, 29,649 discretionary grants worth $19.8 billion dollars
* Associate Professor, Faculty of Law, and Acting Director, Australian Centre for Justice Innovation, Monash University,
Australia. The author would like to thank Peter Cane and Stephen Gray for their helpful comments on a draft of this article.
The author may be contacted at YeeFui.Ng@monash.edu.
1. Grants are defined under the Commonwealth Grants Rules and Guidelines 2017 as: An arrangement for the provision of
financial assistance by the Commonwealth or on behalf of the Commonwealth: under which relevant moneyor other CRF
money is to be paid to a grantee other than the Commonwealth and which is intended to help address one or more of the
Australian Government’spolicy outcomes while assisting the grantee achieve its objectives: Commonwealth Grants Rules
and Guidelines 2017 (Cth) r 2.3 (‘Grants Rules and Guidelines’).
were awarded by the Commonwealth to a wide range of individuals, community groups, sport s
bodies, indigenous organisations and for-profit organisations.
2
It is well-recognised that govern-
ments provide grants to individuals and groups with the aim of achieving governmental policy
outcomes, while assisting the public to achieve their own objectives.
3
However, in recent times, there have been numerous scandals relating to the Commonwealth and
state governments allegedly abusing grants funding programs. For instance, in 2021, in the ‘Car
Park Rorts’affair, the Auditor-General found that a federal car park construction fund worth
$389 million was administered ineffectively, and the Minister had allocated the grants with ‘in-
adequate assessment’for eligibility, with 77 per cent of sites provided to government electorates,
instead of areas of real need with congestion issues.
4
This followed close on the heels of the
2019 ‘Sports Rorts’affair, which resulted in the resignation of the federal Sports Minister, following
allegations that she had intervened in the Community Sport Infrastructure Grant program to gain
political advantage for the Liberal-National Coalition in the 2019 federal election, whilst in a
position of conflict of interest.
5
More recently, in 2022, the Auditor-General found that 54 per cent
of funding decisions on the $184 million Safer Communities Fund‘did not have a clear basis forthe
decision recorded’.
6
Although this article focuses on the federal level of politics, it should also be noted that States
have had issues with the biased allocation of grants funding. For example, the New South Wales
Auditor-General found that the approval processes of the Stronger Communities Fund ‘lacked
integrity’, as $252 million of funding was approved before the state election, with 96 per cent of
funds going to Coalition electorates.
7
A strong criticism is that governments have been engaging in ‘pork barrelling’, that is, the
distribution of public funding to government electorates in a partisan manner, rather than proper
merit-based allocation. This is a significant issue because it means that communities with the
greatest needs are not being funded in favour of less meritorious —or even unmeritorious
—programs. This represents a misuse of public funds by politicians for political gain, which
impedes the broader public interest.
Pork barrelling poses a problem for democracy because the probity of the expenditure of public
funding is crucial towards preserving public trust in Australian democratic institutions. In con-
sidering how to foster and maintain public trust, a number of critical questions emerge: what is the
history and context of grants politicisation in Australia? What are the constitutional, legal and
political mechanisms that regulate grants programs in Australia? And, crucially, how can the
regulatory system be reformed to ensure that public funds are insulated from government abuse?
This article shows that pork barrelling is an intractable problem across multiple governments
over many decades and takes different forms based on electoral systems. Where governments have
the discretion to allocate grants, there is a strong incentive to do so in a partisan fashion to their
2. Australian Government, ‘Grant Award Published’,GrantConnect (Web Page) <https://www.grants.gov.au/Reports/
GaPublishedShow?AgencyStatus=0&DateType=PublishDate&DateStart=01-Jan-2021&DateEnd=31-Dec-2021>.
3. Joanne Kelly, Strategic Review of the Administration of Australian Government Grants Programs (Review, 17 March
2008) 16–18.
4. Auditor-General of Australia, Administration of Commuter Car Park Projects within the Urban Congestion Fund
(Auditor-General Report No 47, 28 June 2021) 6, 10, 11 (‘Administration of Car Park Projects’).
5. Auditor-General of Australia, Awardof Funding Under the Community Sport InfrastructureProgram (Auditor-General
Report No 23, 15 January 2020) 9–11 (‘Community Sport Infrastructure Program’).
6. Auditor General of Australia, Award of Funding under the Safer Communities Fund (Auditor-General Report No 16,
14 February 2022) 6.
7. NSW Auditor-General, Integrity of Grant Program Administration (Auditor-General’s Report, 8 February 2022) 2.
206 Federal Law Review 51(2)
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