IPA-Deakin pleads government to retire community grant ‘bargaining chip’

New research from the IPA-Deakin SME Research Centre has uncovered a link between grant distribution and election cycles, suggesting they are being delivered with the wrong intention.

Based on the nature of community grants and the sole purpose to bolster crucial community services and amenities, the research centre said the link between election cycles and grant delivery was “raising serious concerns about fairness, transparency, and accountability in government spending”.

According to the research centre, the report covered election times from 2018 to early 2025 and examined the extent to which community grants were subject to distributive politics or ‘pork-barrelling’.

Pork-barrelling occurs when voters or constituents from particular regions are influenced by the use of government funds for local projects close to election periods.

Findings from the research highlighted that government-held marginal electorates consistently received a disproportionate share of funding, while opposition-held seats received significantly less support.

The research also found that approximately 10,500 community grants were awarded annually, with an average total value of $4.9 billion in funding across 2018–2025 and a surge of grant approvals in the 12 months leading up to the 2019 and 2022 federal elections.

Following the 2019 and 2022 elections, it was found that once the election had passed, funding priorities swiftly shifted away from the original funding pledges.

Andrew Conway, chief executive of the Institute of Public Accountants, said it was incredibly important to ensure public funds were used to serve communities, rather than political interests.

“Community grants should be allocated based on need, not used as a political tool,” Conway said.

“This report highlights a troubling trend where funding decisions appear to be influenced by election cycles rather than genuine community priorities. This misuse of taxpayer dollars undermines public trust and calls for urgent reform. Stronger transparency, accountability, and independent oversight are essential to restore integrity to the grants process.”

The research centre also revealed a strong correlation between discretionary grants and political influence, which often bypassed competitive or merit-based processes. In addition to this, concerns had been increasingly flagged by audits conducted by the Australian National Audit Office about grant administration.

Despite this attention and flagged concern, enforcement has remained weak, which has allowed governments to allocate funds with little scrutiny, Conway said.

To tackle this, the research centre has recommended an increase in transparency and accountability through independent oversight, expansion of competitive merit-based grant processes, and requiring public justifications for funding decisions.

It was also recommended that legislative loopholes be closed by introducing a legal definition of ‘pork-barrelling’ and strengthened laws to prevent politically motivated grant allocations, public access to grants data be improved, and the introduction of stronger enforcement measures by further empowering auditors.

Professor Jenni Lightowlers, executive dean of business and law at Deakin University, said these growing concerns called for ‘urgent policy reform’.

“Public funds should be spent transparently and fairly to support those who need them most,” she said.

“Instead, the report provides strong evidence that governments have used taxpayer money to strengthen their electoral prospects rather than improve the lives of Australians. Stronger oversight measures and legislative safeguards are essential to prevent politically motivated grant allocations and restore trust in government spending.”