The Australian Sports Commission (ASC) has taken the razor to the country's elite swimming programme in the wake of the Olympic team's flop at the London Games and a number of scathing reports into its management.
Swimming remains Australia's top-funded sport but will have its funding cut by 5.8 per cent to $8.41 million in the 2013-14 financial year (July 1, 2013 - June 30, 2014), according to data released on the ASC's website on Monday.
Swimming has traditionally been a well-spring of Olympic gold for Australia, the country that produced Dawn Fraser and Ian Thorpe, but the team reaped their lowest medal haul in 20 years from the London pool, with a solitary gold and no individual titles.
Governing body Swimming Australia (SA) was also rocked by critical reviews into its governance and the Olympic team's culture, and a scandal involving top swimmers taking a sedative banned by the Australian Olympic Committee as part of an unofficial 'bonding' exercise in the lead up.
Athletics also took a hit in the annual allocation, with its funding cut by 3.8 per cent to $6.74 million after the team failed to meet the London medals target.
Overall, sports funding in Australia will rise a modest 1.4 percent year-on-year to just under $123 million, with sailing recognised for its three-gold medal performance at London with a generous 16.7 percent hike to $6.5 million.
Canoeing (17.4 per cent) and water polo (21.5 per cent) were also among the big winners, along with Paralympics sports, which will receive a 14.1 percent boost across the board.
The allocation comes a month after the ASC threatened to cut funding to its top sports if they failed to bring their governance up to scratch, with demands for more transparency over their use of their funding.
ASC chair John Wylie said the allocation was in line with Australia's "Winning Edge" master plan from 2012-2022, which set the country targets to be a top-five nation at summer Olympics, top 15 at the Winter Games and have more than 20 world champions annually.
"Our investment decisions were based on a set of principles that assessed sports ability to provide sound evidence that they can contribute to the targets," Wylie said in a statement.
"We have also asked that sports be more accountable for best practice governance and commercial performance under our investment approach."
The Australian Olympic Committee, which has long called on the federal government to spend more to prevent Australia losing its traditional status as a sporting power, endorsed the model.
"There will always be winners and losers under the new strategy but we fully support Winning Edge and its goals," AOC chief John Coates said in a statement.
"Sports are now more accountable and they are not only judged on performance but governance."