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Government rewinds on regional grants threat

The Coalition government appears to have had a change of heart and will now fund 57 unsigned regional development grants promised by its Labor predecessors.

During the election campaign, Nationals Leader and Minister for Infrastructure and Regional Development Warren Truss said the Coalition would not honour projects approved under Labor’s Regional Development Australia Fund (RDAF) if contracts were not signed.

In October, Mr Truss said the Rudd Government had pledged money for local projects based on funding from a mining tax that “raised virtually no money”.

“Non-contracted announcements made by the Labor Government have the status of election promises and do not bind an alternative government,” he said.

However, Mr Truss today announced that the government would fund uncontracted projects under rounds two, three and four of the RDAF, as well as the Community Infrastructure Grants Program (CIG).

The funding is based on the condition that contracts are finalised within six months.

However, grants announced in the fifth and subsequent rounds of the RDAF will not be honoured. These were “Labor election commitments and were not funded,” Mr Truss said.

The Municipal Association of Victoria welcomed the ending of uncertainty surrounding early rounds of the RDAF, but encouraged local councils to continue advocating to their local MPs for the “many worthwhile projects” in round five. It is estimated there are more than 100 round five projects in Victoria alone.

The government said today it had now funded all regional development projects it promised during the campaign.

In total it will provide up to $342 million – including the uncontracted RDAF grants – to around 300 community projects across Australia under its new Community Development Grants Program.

The government said the Department of Infrastructure and Regional Development would conduct a “value-for-money assessment” against program guidelines to ensure transparency in decisions about funding election commitments.

“In order for an assessment to be undertaken funding recipients will be required to provide detailed project information, including project outcomes and benefits, planning and costs and delivery timeframes,” Mr Truss said.

The future of hundreds of grants under the Building Multicultural Communities Program also promised by the previous government remains uncertain.

A Department of Infrastructure spokesperson said: "The announcement about the Regional Development Australia Fund has no impact on the Building Multicultural Communities Program."