Government used sporting grants as slush fund for re-election campaign

The Morrison government used a $100 million community sports program as a slush fund for its re-election campaign, overlooking projects approved by an independent panel in favour of splashing cash in marginal seats.

A scathing report from the Australian National Audit Office has found Nationals deputy leader Bridget McKenzie, who oversaw the program as sports minister, ignored merit-based recommendations by Sport Australia for almost half the successful projects in favour of seats critical to the government's re-election hopes.

It is the second time the federal government has been warned to lift its performance on the use of taxpayer funds in three months, after a review in November found a $220 million jobs scheme has suffered from conflicts of interest and personal intervention by ministers.

The auditor then savaged the government's management of the sweeping policy to create "jobs and growth" in 10 regions as part of its promise at the 2016 election, with some decisions skewed in favour of Coalition seats.

The review into the Community Sports Infrastructure Grant, released on Wednesday, revealed 41 per cent of projects awarded funding were not recommended by Sport Australia based on assessment against the programs's published criteria.

In one round, projects located in "marginal" and "targeted" electorates had applied for 36 per cent of the total funding and received 47 per cent of the total amount approved, the audit revealed.

Former federal sports minister Bridget McKenzie (left) has come under fire for handing over sporting grants in marginal seats.Credit: AAP

The review found successful applications were "not those that had been assessed as the most meritorious", finding Senator McKenzie's office had run a "parallel" assessment process to decide how to distribute the funds.

It found a "distributional bias" in the way projects were approved, and while money was distributed fairly between states and territories based on population, it was not necessarily based on the merit of applications.

Senator McKenzie is now the Agriculture Minister following the May 2019 election.Credit: Sydney Morning Herald

"The award of funding reflected the approach documented by the Minister's Office of focusing on 'marginal' electorates held by the Coalition as well as those electorates held by other parties or independent members that were to be 'targeted' by the Coalition at the 2019 election," the report found.

"Applications from projects located in those electorates were more successful in being awarded funding than if funding was allocated on the basis of merit assessed against the published program guidelines."

The Community Sport Infrastructure Grant Program was launched in 2018 to encourage community participation in sport, including building female change rooms and lighting upgrades for local sporting clubs.

The auditor began a review of the program's management last year after Labor seized on revelations Liberal candidate in South Australia Georgina Downer – not local MP Rebekha Sharkie – had presented a South Australian bowling club with a novelty cheque for $127,000.

Sport Australia, which administered the program, received 2056 project proposals seeking more than $396.6 million, with $100 million awarded to 684 projects across three rounds. The final round was announced in April prior to the May election.

The audit revealed a separate process undertaken by Senator McKenzie's office "drew upon considerations other than those identified in the program guidelines, such as the location of projects".

"It was this assessment process that predominantly informed the minister's funding decisions, rather than Sport Australia's process," the audit said.

Opposition sport spokesman Don Farrell said the government's "shameless politicisation" of taxpayers' money slated for community sports clubs was "appalling, unacceptable and cannot go unpunished".

"If Scott Morrison has any standards whatsoever for the conduct of his ministers, he must immediately stand down Bridget McKenzie."

"Failure to do so will prove that he does not believe his government is accountable to Australians."

Senator McKenzie said the program, which funded projects across the country to help get people up and moving, was popular.

"All projects selected for funding were eligible to receive it," she said.