The ARU is broke. They are cutting money everywhere. Why you think that $28k funding to the Shute Shield clubs is sacred, I do not know.
The sad fact for the SS clubs is that the funding would have inevitably gone, anyway. I doubt the ARU ever had intentions of funding comps in Sydney, Brisbane, greater ACT area, Melbourne and Perth. With the Super XV sides now all concentrating their players in the local comps, the local comps will improve over time and the Sydney and Brisbane comps will eventually supply a lesser porportion of players.
The guys up in arms are all heavily involved in SS clubs and can only see funding removed that they see as deserved. Well, I am sure the ARU would love to give more money to all levels of rugby, but sadly they cannot. As BH81 stated previously, the relevance for the SS and Brisbane Premier Rugby comps is slowly diminishing for various reasons, and with there being a major money issue, funding has been cut.
The belief that the fat cats in the ARU are stuffing their pockets with the money is, as I pointed out, incorrect as the ARU have been desperately laying people off and cutting wages as well. For instance, Pulver alone earns a lot less than half of the obscene wage of JON, and the board of directors, who are supposed to be paid $40k for the chairman and $20k for the board members (set as the recommended anount for corporations), have halved their payments.
I will repeat this has been going around and around for pages, but at the end of the day the following is true (as far as I am aware):
1. the ARU is nearly broke (and would have probably gone broke without the increased TV deal)
2. they have cut costs everywhere, including an ill thought out and silly junior levy
3. SS clubs are a very important part of player development, but that importance will be slowly diminished somewhat by the NRC and rise of other captial city competitions
4. the ARU, as a result of all of the above, has cut funding to SS clubs (which was probably inevitable anyways, but has happened sooner than expected)