EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Finance
Financial Framework (Supplementary Powers) Act 1997
Financial Framework (Supplementary Powers) Amendment (Infrastructure, Transport, Regional Development, Communications, Sport and the Arts Measures No. 2)
Regulations 2025
The Financial Framework (Supplementary Powers) Act 1997 (the FFSP Act) confers on the Commonwealth, in certain circumstances, powers to make arrangements under which money can be spent; or to make grants of financial assistance; and to form, or otherwise be involved in, companies. The arrangements, grants, programs and companies (or classes of arrangements or grants in relation to which the powers are conferred) are specified in the Financial Framework (Supplementary Powers) Regulations 1997 (the Principal Regulations). The powers in the FFSP Act to make, vary or administer arrangements or grants may be exercised on behalf of the Commonwealth by Ministers and the accountable authorities of non‑corporate Commonwealth entities, as defined under section 12 of the Public Governance, Performance and Accountability Act 2013.
The Principal Regulations are exempt from sunsetting under section 12 of the Legislation (Exemptions and Other Matters) Regulation 2015 (item 28A). If the Principal Regulations were subject to the sunsetting regime under the Legislation Act 2003, this would generate uncertainty about the continuing operation of existing contracts and funding agreements between the Commonwealth and third parties (particularly those extending beyond 10 years), as well as the Commonwealth’s legislative authority to continue making, varying or administering arrangements, grants and programs.
Additionally, the Principal Regulations authorise a number of activities that form part of intergovernmental schemes. It would not be appropriate for the Commonwealth to unilaterally sunset an instrument that provides authority for Commonwealth funding for activities that are underpinned by an intergovernmental arrangement. To ensure that the Principal Regulations continue to reflect government priorities and remain up to date, the Principal Regulations are subject to periodic review to identify and repeal items that are redundant or no longer required.
Section 32B of the FFSP Act authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Principal Regulations. Section 32B also authorises the Commonwealth to make, vary and administer arrangements for the purposes of programs specified in the Principal Regulations. Section 32D of the FFSP Act confers powers of delegation on Ministers and the accountable authorities of non-corporate Commonwealth entities, including subsection 32B(1) of the FFSP Act. Schedule 1AA and Schedule 1AB to the Principal Regulations specify the arrangements, grants and programs.
Section 65 of the FFSP Act provides that the Governor-General may make regulations prescribing matters required or permitted by the FFSP Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the FFSP Act.
The Financial Framework (Supplementary Powers) Amendment (Infrastructure, Transport, Regional Development, Communications, Sport and the Arts Measures No. 2)
Regulations 2025 (the Regulations) amend Schedule 1AB to the Principal Regulations to establish legislative authority for government spending on the Major and Local Community Infrastructure Program (the program). The program will be administered by the Department of Infrastructure, Transport, Regional Development, Communications, Sport and the Arts.
The program will deliver the Australian Government’s community infrastructure commitments from the 2025-26 Budget, the Pre-election Economic and Fiscal Outlook 2025 and the 2025 Federal election.
The program aims to deliver vital community and sporting infrastructure, open space improvements and other community priorities. The objectives of the program are to build resilient communities through the provision of social and community facilities, improve community amenity, accessibility and liveability, and drive economic growth in communities and the broader region.
Funding of up to $560.9 million over four years from 2025-26 will be available to support projects under the program.
Details of the Regulations are set out at Attachment A. A Statement of Compatibility with Human Rights is at Attachment B.
The Regulations are a legislative instrument for the purposes of the Legislation Act 2003.
The Regulations commence on the day after registration on the Federal Register of Legislation.
Consultation
In accordance with section 17 of the Legislation Act 2003, consultation has taken place with the Department of Infrastructure, Transport, Regional Development, Communications, Sport and the Arts.
Attachment A
Details of the Financial Framework (Supplementary Powers) Amendment (Infrastructure, Transport, Regional Development, Communications, Sport and the Arts Measures No. 2) Regulations 2025
Section 1 – Name
This section provides that the title of the Regulations is the Financial Framework (Supplementary Powers) Amendment (Infrastructure, Transport, Regional Development, Communications, Sport and the Arts Measures No. 2) Regulations 2025.
Section 2 – Commencement
This section provides that the Regulations commence on the day after registration on the Federal Register of Legislation.
Section 3 – Authority
This section provides that the Regulations are made under the Financial Framework (Supplementary Powers) Act 1997.
Section 4 – Schedules
This section provides that the Financial Framework (Supplementary Powers) Regulations 1997 (the Principal Regulations) are amended as set out in the Schedule to the Regulations.
Schedule 1 – Amendments
Financial Framework (Supplementary Powers) Regulations 1997
The item in Schedule 1 amends Schedule 1AB to the Principal Regulations to establish legislative authority for government spending on an activity to be administered by the Department of Infrastructure, Transport, Regional Development, Communications, Sport and the Arts (the department).
Item 1 – In the appropriate position in Part 2 of Schedule 1AB (table)
This item adds one new table item to Part 2 of Schedule 1AB.
Table item 14 – Grants for major and community infrastructure projects
New table item 14 establishes legislative authority for government spending on the Major and Local Community Infrastructure Program (the program).
Funding of up to $560.9 million will be provided as grants of financial assistance to a state or territory for the planning, construction or upgrading of infrastructure, including community infrastructure, and for incidental matters.
The program will deliver the Australian Government’s community infrastructure commitments from the 2025-26 Budget, the Pre-election Economic and Fiscal Outlook 2025 and the 2025 Federal election.
The program aims to deliver vital community and sporting infrastructure, open space improvements and other community priorities. The objectives of the program are to build resilient communities through the provision of social and community facilities, improve community amenity, accessibility and liveability, and drive economic growth in communities and the broader region.
Eligible projects must be consistent with the intent of the Australian Government’s commitment and have as a primary outcome the construction, upgrade or extension of infrastructure that provides economic and social benefits to the community, or be a feasibility study, business case or masterplan for a project of this type. These projects will include community infrastructure such as sporting facilities, and community and other recreational facilities. The grant funding amounts are as determined by the Australian Government in making each project commitment and no additional funding is available under the program beyond these amounts.
Successful grantees can only spend the Australian Government funding on activities directly related to the approved project. Eligible expenditure includes the direct costs of the project; costs incurred in order to obtain planning, environmental, or other regulatory approvals in delivering the project; costs incurred to undertake required financial auditing and project expenditure; and costs incurred to meet Australian Government project signage requirements.
Funding amount and arrangements, merits review and consultation
Funding of up to $560.9 million over four years from 2025-26 for the program will be included in the 2025-26 Mid-Year Economic and Fiscal Outlook and the Portfolio Additional Estimates Statements for the Infrastructure, Transport, Regional Development, Communications, Sport and the Arts portfolio. Funding for the item will come from Program 3.1: Regional Development, which is part of Outcome 3.
The department will deliver the program through a closed, non-competitive grant process, which will be administered in accordance with the relevant policy frameworks and legislation, including the Public Governance, Performance and Accountability Act 2013, the Public Governance, Performance and Accountability Rule 2014 and the Commonwealth Grants Rules and Principles 2024 (CGRPs).
Consistent with the CGRPs, the department has developed grant opportunity guidelines and will have regard to the nine key principles in administering the grant.
Grant opportunity guidelines are currently published on the GrantConnect’s website (www.grants.gov.au) under reference GO07867. The grant opportunity opened on 1 September 2025 and will be closed on 1 March 2026. The program will operate over four years from 2025-26, with all projects expected to be completed by 30 June 2029.
Only projects identified by the Australian Government will be invited to apply for funding. Applications will be assessed by the department against publicly notified assessment criteria to confirm value with relevant money and to ensure that they meet benchmarks against the assessment criteria. Projects will not be ranked against each other and only those assessed as meeting the required benchmark will be approved for funding.
Funding decisions will be made by the Minister for Infrastructure, Transport, Regional Development and Local Government and the grants will be administered by the department. Once awarded, information about the grant will be made available on the GrantConnect website and on the department’s website (www.infrastructure.gov.au).
Funding for approved projects will only be provided to local, state or territory government organisations. Successful applicants must enter into a legally binding funding agreement in order to receive funding for an approved project.
Funding will only be provided in accordance with the terms of the funding agreement entered into between the Australian Government and the relevant local, state or territory government entity. The funding agreement will set out the maximum amount payable by the Australian Government and include other terms and conditions of the funding, including delivery of the specified and approved project, and reporting requirements. All funding recipients will be required to comply with all relevant Commonwealth, state and territory legislation and regulations.
Independent merits review of decisions made in connection with the program would not be appropriate on the basis that the program involves the allocation of a finite resource, and merits review in connection with such decisions could result in an allocation that has already been made to another party being affected by overturning the original decision. The Administrative Review Council has recognised that it is justifiable to exclude merits review in relation to decisions of this nature (see paragraphs 4.11 to 4.19 of the guide, What decisions should be subject to merit review?).
The program guidelines will ensure that the decision-making process is objective and transparent and that eligibility criteria are clear. Persons and organisations affected by decisions would have recourse to the Commonwealth Ombudsman where appropriate.
The department has consulted with the Department of Finance and the Department of the Prime Minister and Cabinet to inform the design and development of the grant opportunity guidelines. The program is a non-competitive, invitation only program. Only entities invited by the Government to apply are eligible for funding for the nominated project. As such, there was no wide consultation on the development of the program guidelines. This is consistent with the approach taken for previous similar grant programs for the delivery of the Government's election commitments, and the guidelines comply with the provisions of the CGRPs. The department will consult with the grantees through the delivery of the program.
Constitutional considerations
Noting that it is not a comprehensive statement of relevant constitutional considerations, the purpose of the item references the following powers of the Constitution:
- the power to grant financial assistance to any state (section 96); and
- the territories power (section 122).
Power to grant financial assistance to states and territories power
Section 96 of the Constitution empowers the Parliament to ‘grant financial assistance to any state on such terms and conditions as the Parliament thinks fit’.
Section 122 of the Constitution empowers the Parliament to ‘make laws for the government of any territory’.
The program will facilitate the delivery of the Australian Government’s community infrastructure project commitments made in the context of the 2025 Federal election, the 2025-26 Budget and the Pre-election Economic and Fiscal Outlook 2025. Funding for infrastructure projects will be granted to local, state and territory government entities, who will engage with other project proponents where required, to deliver the projects.
Attachment B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Financial Framework (Supplementary Powers) Amendment (Infrastructure, Transport, Regional Development, Communications, Sport and the Arts Measures No. 2)
Regulations 2025
This disallowable legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the legislative instrument
Section 32B of the Financial Framework (Supplementary Powers) Act 1997 (the FFSP Act) authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Financial Framework (Supplementary Powers) Regulations 1997 (the Principal Regulations) and to make, vary and administer arrangements and grants for the purposes of programs specified in the Regulations. Schedule 1AA and Schedule 1AB to the Principal Regulations specify the arrangements, grants and programs. The powers in the FFSP Act to make, vary or administer arrangements or grants may be exercised on behalf of the Commonwealth by Ministers and the accountable authorities of non‑corporate Commonwealth entities, as defined under section 12 of the Public Governance, Performance and Accountability Act 2013.
The Financial Framework (Supplementary Powers) Amendment (Infrastructure, Transport, Regional Development, Communications, Sport and the Arts Measures No. 2)
Regulations 2025 (the Regulations) amend Schedule 1AB to the Principal Regulations to establish legislative authority for government spending on the Major and Local Community Infrastructure Program (the program). The program will be administered by the Department of Infrastructure, Transport, Regional Development, Communications, Sport and the Arts.
Funding of up to $560.9 million over four years from 2025-26 will be provided as grants of financial assistance to a state or territory for the planning, construction or upgrading of infrastructure, including community infrastructure, and for incidental matters.
The program will deliver the Australian Government’s community infrastructure commitments from the 2025-26 Budget, the Pre-election Economic and Fiscal Outlook 2025 and the 2025 Federal election.
The program aims to deliver vital community and sporting infrastructure, open space improvements and other community priorities. The objectives of the program are to build resilient communities through the provision of social and community facilities, improve community amenity, accessibility and liveability, and drive economic growth in communities and the broader region.
Human rights implications
This disallowable legislative instrument does not engage any of the applicable rights or freedoms.
Conclusion
This disallowable legislative instrument is compatible with human rights as it does not raise any human rights issues.
Senator the Hon Katy Gallagher
Minister for Finance