Federal Labor-held electorates have received more than 90% of the funding approved under a $568 million Australian community grants program during its initial five months, raising questions about the program’s allocation process. The grants scheme, known as the Major and Local Community Infrastructure program (MLCIP), was launched last year and is now under review following a Senate inquiry initiated by opposition and crossbench parties.
Analysis of the funding distribution shows that 92% of the $248 million in grants approved since March 2026 have gone to projects located in federally held Labor seats. Victoria and New South Wales have been the largest recipients, together securing nearly $190 million in project approvals. Victoria, facing a state election in November, has received $99 million, with $92 million of that earmarked for Labor-held seats, including electorates where the party faces potential losses.
Notable allocations in Victoria include a $25 million grant for the Bacchus Marsh aquatic centre, located in the federal seat of Hawke and the state seat of Eureka, both held by Labor. Eureka and Bendigo West, another vulnerable state seat, have been approved for almost $7 million worth of projects from the program. Additionally, Lake Macquarie council in New South Wales, covering state Labor seats and an independent seat, received 13 grants worth a combined $8.8 million, mostly for upgrades to sports facilities.
Other states such as Western Australia, Tasmania, and Queensland have been allocated significantly smaller amounts—less than $25 million, $15 million, and $8 million respectively—though all have outstanding commitments close to $50 million yet to be formally approved.
The opposition has criticized the program for disproportionately directing funds to Labor electorates, accusing the federal government of using the grants to bolster state Labor counterparts ahead of upcoming elections. Federal Liberal senator James Paterson described the funding pattern as “nakedly partisan,” warning that public money was being used to protect “political furniture.”
The Albanese government has defended the program’s design, emphasizing that final decisions rest with the infrastructure minister, Catherine King, rather than local MPs or proponents. King’s office stated that the program operates as a closed, non-competitive grant scheme delivering election commitments made by the Labor Party, with applications required to meet specific benchmarks to be deemed cost-effective. However, King declined to specify how project location or political factors influenced approvals.
Independent MP Helen Haines representing the federal seat of Indi in rural Victoria stressed that funding decisions should be based on demonstrated community need rather than electoral advantage. “Election should not be the selection,” she said.
The Senate will conduct a two-month inquiry into the MLCIP, examining how projects were selected, potential conflicts of interest, and whether the process was equitable. The inquiry was proposed by the Greens and supported by Coalition and crossbench senators; Labor has opposed the investigation. Greens senator Steph Hodgins-May called for transparency, stating the public has the right to understand how their money is allocated and who benefits.
Meanwhile, in Victoria, state Labor MPs were reportedly encouraged to submit scaled-back, realistic lists of local projects ahead of the budget and the forthcoming election, reflecting fiscal constraints and new Premier Ben Carroll’s commitment to responsible spending. Some MPs have collaborated on joint bids for projects spanning multiple electorates. State government sources have denied involvement in the distribution of federal grants.
With Victoria’s state debt projected to reach nearly $200 billion by 2030 and voter concerns emerging around fiscal management, scrutiny over the allocation and timing of federal grant program funding is expected to intensify in the coming months.