Finance Minister Katy Gallagher has unveiled new rules for the issuing of federal grant money. Photo: Michelle Kroll.
The rules for dishing out government grant money are about to change, with an onus to be placed on federal ministers to explain themselves if they give grants against the advice of their departments.
Finance Minister Katy Gallagher, who is also Public Service Minister, unveiled the new-look Commonwealth Grants Rules and Principles (CGRPs) on Thursday (4 July), saying they will bolster integrity in the grants system.
Under the new rules, ministers will be required to report to her the details of grants they have awarded to recipients in their own electorate – and any grants they have approved that officials recommended be rejected. That is to be done “as soon as practicable” and the information will be tabled in Federal Parliament every quarter.
The new CGRPs will take effect from 1 October, 2024, replacing the current annual reporting requirements.
The Minister said the changes marked a significant improvement in transparency and accountability following a string of pork-barrelling scandals the previous Coalition government oversaw.
She said the Labor Federal Government was committed to restoring the public’s trust and faith in government grant processes.
“Grants provide significant benefits to the Australian community, and we want to ensure the process of awarding grants is open and transparent,” Senator Gallagher said.
“After the previous Coalition government’s record with sports rorts, Building Better Regions and commuter car parks [scandals], there is an expectation that when it comes to the administration of grants and taxpayers’ money, governments should act with the highest standards.”
The so-called ”sports rorts scandal” began in 2019 in the lead-up to that year’s federal election and involved the then sports minister Bridget McKenzie ignoring Sports Australia’s official grants program advice to instead use her ministerial discretion to favour marginal or targeted electorates in the allocation of grants.
Similarly, the Coalition was accused of exploiting the Building Better Regions Fund to deliver 96 per cent of allocated grant money to bolster Coalition-held seats.
The commuter car parks rorts affair involved a series of grants the then government made to build car parks near train stations, with it being revealed that the projects were located almost exclusively in Liberal-held seats and marginal electorates.
The new rules come with strict reporting requirements for ministers and the public service when it comes to grants.
Transparency will be increased through the removal of the exemption from publication of one-off ad hoc grant guidelines and through requiring information on grants awarded to be linked to the relevant published grant guidelines on GrantConnect.
Briefing requirements will be strengthened when making recommendations and decisions to award, or not award, grants.
The changes will implement key recommendations made by the Auditor-General and the Joint Committee of Public Accounts and Audit arising out of the administration of previous grant programs.
Senator Gallagher said the new rules contributed to a government commitment made under the Open Government Partnership, in Australia’s Third National Action Plan 2024-2025.
“They will enhance accountability and provide the Australian public with greater confidence that grants are delivered in the best interests of the community,” she said.
Australian Public Service officials will have to establish and document whether a proposed activity is a grant before applying the CGRPs.
Accountable authorities and officials involved in grants administration must comply with government policies and legislation relevant to grants administration.
And, according to the rules outlined in the CGRPs document, officials must:
- Develop grant opportunity guidelines for all new grant opportunities, and revised guidelines where significant changes have been made to a grant opportunity;
- Have regard to the nine key principles for grants administration;
- Ensure that grant opportunity guidelines and related internal guidance are consistent with the CGRPs;
- Advise the relevant minister on the relevant requirements of the legislation and rules governing the issuing of grants, where a minister is considering a proposed expenditure of relevant money for a grant.
“Where an accountable authority or an official approves the proposed commitment of relevant money in relation to a grant, the accountable authority or official who approves it must record, in writing, the basis for the approval relative to the grant opportunity guidelines and the key principle of achieving value with relevant money,” the rules state.
“Officials must provide written advice to ministers, where ministers exercise the role of an approver.”
The Commonwealth Grants Rules and Principles 2024 will replace the Commonwealth Grants Rules and Guidelines 2017.
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