Commonwealth funding for strategic policy work

On 19 December 2024, the Australian Government released the report for the Independent Review of Commonwealth funding for strategic policy work (the review) and its response. The review assessed all Commonwealth funding to third-party organisations that conduct national security-related research, education and engagement activities.

This guidance reflects the review’s findings and the government’s response:

Independent Review of Commonwealth funding for strategic policy work
Australian Government response to the Independent Review of Commonwealth funding for strategic policy work

In providing its guidance, the government recognises the value of contestability and the independent consideration of national security policy by the strategic policy sector. While the government will set the priorities for national security research, it expects and values pragmatism and flexibility in how these priorities are applied and seeks rigour in the process. Contestability is essential to national security and strengthens the work of both the sector and government, even when there is agreement to disagree.

The strategic policy sector

The strategic policy sector (the sector) comprises third-party organisations that conduct national security-related research, education and engagement activities. Strategic policy work is defined as national security-focused and policy-relevant research, events, and professional development activities. Strategic policy work in this context does not include capability uplift, operational training, or technical research and development.

This guidance is intended to provide transparency of the government’s commissioning of strategic policy work from the sector, including the role of government agencies and expectations for the sector.

Commonwealth funding to the sector: a principles-based framework

The government’s approach to commissioning strategic policy work from the sector is underpinned by a principles-based framework. This framework is reflected throughout the commissioning process, and is complementary to existing legislation and policy, including the Commonwealth Procurement Rules (CPRs) (for procurements) and the Commonwealth Grants Rules and Principles 2024 (CGRPs) (for grants).

When commissioning work from the sector, agencies must adhere to the relevant legislation, the CPRs and/or CGRPs, and align with the principles-based framework.

Annual research priorities

Ministers agree strategic policy research priorities for the sector on an annual basis (annual research priorities). These are published on the PM&C website.

The annual research priorities are designed to better guide and focus government funding for national security related research activities. While the priorities should be considered by both the commissioning agency and the recipient organisation, they are not intended to be criteria for Commonwealth funding. Agencies have the discretion to commission work according to their own internal priorities.

The sector: best-practice governance

Organisations receiving operating funding for strategic policy work are encouraged to implement best-practice governance measures to ensure value for money for the government and the sustainability and contestability of work produced by the sector. It is a decision for the sponsoring agency to specify these requirements to an organisation; the sponsoring agency retains the right to include governance requirements as a precondition for Commonwealth funding.

Examples of best-practice governance expected from the sector are:

Skills matrices for board positions

Strategic policy organisations are encouraged to implement a skills matrix for board positions. For larger strategic policy organisations, this may be considered in a funding application process by the sponsoring agency.

Observer status on boards

Government observer status is expected, at a minimum, on boards that receive Commonwealth operating funding. The role of the government observer is to provide advice on government priorities when requested by the board, and ensure value for money for the government. The government observer does not have any participation responsibilities.

Transparency of funding

It is important to maintain the independence of the sector’s work. As such, a sponsoring agency may seek transparency of additional funding from organisations receiving Commonwealth operating funding. This may include visibility of additional corporate, philanthropic, and/or foreign funding. How the sponsoring agency chooses to engage with an organisation or request this transparency is a decision for that agency.