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Bridget McKenzie Resigns From Cabinet Over 'Sports Rorts' Scandal

Scott Morrison has confirmed agriculture minister Bridget McKenzie will step down from cabinet over her involvement with the sports funding scandal.

After weeks of pressure and unfolding controversy, the Prime Minister announced on Sunday that Nationals senator McKenzie, the sports minister at the time the funding was allocated under the $100million Community Sports Infrastructure Grant program, would stand down.

It comes after an auditor-general report into the program found there was "evidence of distribution bias in the award of grant funding", and that most of the $100 million program was focused on marginal seats that the Coalition was trying to win at the election.

However, an investigation by the prime minister's own department boss Phil Gaetjens found there was a "statistically similar ratio" when comparing the rate of grant approvals to marginal seats to those of other seats.

Gaetjens identified the need for greater transparency around ministerial discretion in grants, but not getting rid of such discretion.

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"What the secretary has made very clear is that she has exercised that discretion and in his view, that has not been done with the political considerations that others have suggested," Morrison told reporters on Sunday.

But, in a finding which led to McKenzie's resignation, Gaetjens determined the minister was a member of a gun club that received a $36,000 grant but had not properly declared it.

There had also been an undeclared conflict of interest in terms of McKenzie's membership of Field and Game Australia, which received grants in the Northern Territory and Warrnambool.

Scott Morrison announces that Bridget McKenzie had tendered her resignation. Image: AAP.

Morrison said where "deficiencies have been identified in transparency and documentation" that would be remedied.

"This is Federal Cabinet, there are standards that must be upheld and she [McKenzie] understands that and so do I," Morrison said.

But he added that the government would now consider how the program might be extended in the May budget.

In his address on Sunday, the PM also thanked McKenzie for her service to the government.

"I particularly want to thank Bridget for the amazing work she has done regional Australia," he said.

"She has been a drought champion for these farming and rural communities around the country."

Senator McKenzie, who was agriculture minister and also resigned as deputy Nationals leader, said in a statement she was committed to staying on in parliament and fighting for rural and regional Australia.

"I have always taken my role as a Minister of the Crown very seriously and I understand that the community expects parliamentarians to abide by the highest standards," she said, adding that she accepted the inquiry report.

"I maintain that at no time did my membership of shooting sports clubs influence my decision making, nor did I receive any personal gain.

"However, I acknowledge that my failure to declare my memberships in a timely manner constituted a breach of the prime minister's ministerial standards."

She also stood by the idea of ministerial discretion in approving grants, saying it was "important to our democratic process".

McKenzie and the government have been accused by Labor of "outrageous" behaviour and "pork-barrelling on an industrial scale", claiming they used the money as an election sweetener in marginal seats. Of the 10 electorates that were awarded the most funding, nine were ones the Coalition wanted to win, or were considered marginal.

The program in question was a $100 million scheme aiming to provide funding to local sporting clubs for upgrades like new dressing rooms or playing field upgrades.

Morrison and McKenzie in 2017. Image: AAP

The federal auditor-general launched a review of the sports grants program, and handed down its report in mid-January and it was damning.

The report ruled that 70 percent of the second round and 73 percent of the third round of projects approved by Senator Bridget McKenzie -- then the federal sports minister, now agriculture minister -- were not recommended by Sport Australia.

Labor leader Anthony Albanese said it was "about time" the minister resigned.

"But this scandal is bigger than one minister, and we still need to get to the bottom of these tawdry sports rorts," he said.

Deputy prime minister Michael McCormack will step in as agriculture minister.

With AAP.