THE Federal Government will not pay out $350 million in grants promised by Labor in the lead up to the election campaign, but will deliver most of the previous government's regional grants.
Deputy Prime Minister Warren Truss announced his decision over the future of Labor's Regional Development Australia Fund on Wednesday.
The decision will see the Abbott Government deliver grants to all RDAF proposals under rounds two, three and four, on the condition that contracts are finalised within six months.
But a statement from Mr Truss' office said the government would not be backing a raft of projects Labor had promised during and before the election campaign under rounds 5 and "5b".
The announcement comes after the future of the grants, largely for councils, was in doubt, after the change of government.
Mr Truss said a further $342 million would also go to 300 smaller infrastructure projects around the country, under the government's new Community Development Grants Program.
"Through responsible management of the budget we have found additional funds for these uncontracted projects without a mining tax," he said.
"The new Community Development Grants Program funding will support needed infrastructure that promotes stable, secure and viable local and regional economies."
The funding program will be run by the Infrastructure Department, with funding applicants needed to provide "detailed project information" on benefits, planning, costs and delivery timeframes.
However, the statement did not outline where the new funding had specifically come from, with the government is currently referring such questions to the imminent release of the mid-year budget update.
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