Press Conference, Parliament House

SUBJECTS: Defence Estate Audit; The Secretary of the Department of Defence; Syria

RICHARD MARLES, DEPUTY PRIME MINISTER: Today, the Albanese Government is announcing the most significant reform to Australia’s Defence estate in our nation’s history. For any organisation, its home, its land, its infrastructure, its bricks and mortar are fundamental to what it can do. And that is most certainly the case when it comes to Defence. How far our planes can fly, how well we can train our troops, the capability of our maritime deployments — in so many ways — is defined by the quality of our bases. Now, as we face the most complex strategic circumstances since the end of the Second World War, what became manifest from the Defence Strategic Review, which was undertaken in 2022 and 2023, was a need to invest in our bases in the north and in the west: HMAS Stirling in Rockingham, and that string of bases from Cocos Island through Learmonth in Exmouth, through Curtin in Derby, Tindal in Katherine, Darwin, and Scherger in Weipa. And we’ve been doing that. We now have exquisite berthing capacities at HMAS Coonawarra in Darwin, which last year, for the first time, saw a UK aircraft carrier come alongside. We’ve got much more fuel capacity at RAAF Base Tindal, for example, and we’re engaging in an $8 billion redevelopment of HMAS Stirling ahead of the Submarine Rotational Force – West. And that work is being undertaken right now. But at the same time, what became clear was that Defence, as one of the largest owners of property in the country, had a very significant estate, much of which was not being used. Now, in truth, the issues around the Defence estate have been well known within Defence circles for a very long time. And it was with this in mind that the Government commissioned Jan Mason, a former Deputy Secretary in the Department of Finance and a former Managing Director of Defence Housing Australia, and Jim Miller, a former Chair of Infrastructure Victoria, to undertake an audit of the Defence estate. They’re both here today, and you’ll be able to ask questions of them. But let me just say up front how grateful we are for their work. It was thorough, it was exhaustive, but in so many ways it was also damning. And I do want to take you to some of what the report says. On page 33 — and I’m quoting — it says: “Defence is constrained by the weight of its past when it comes to management of the estate. Today’s estate footprint comprises numerous legacy sites without a clear ongoing link to current or future capabilities. Urgent interventions are needed to correct the unsustainable trajectory that has resulted from decades of deferred decisions on contentious estate issues.” On page 35: “Defence is holding more property than it needs and is carrying the burden of past indecision to reorient the estate towards more contemporary and future needs.” Page 35 again: “Attempts to consolidate and rationalise property holdings in the past have been stymied by a lack of political and organisational will to overcome challenges.” And page 13: “It is clear that maintaining the status quo is not an option.” And so today, we are making those decisions. Today, we are taking the necessary action. I really want to acknowledge Peter Khalil, Assistant Minister for Defence, who has done so much work on this since the election and who has really led the Government’s work in relation to the response to the Defence Estate Audit. And let me also acknowledge Matt Thistlethwaite, who did an enormous amount of work in this capacity as well before the election. But today, we are announcing that we are agreeing — or agreeing in principle — to every one of the 20 recommendations which are made by the Defence Estate Audit. That includes Recommendation One, which at its heart recommends the divestiture of 68 properties. Now, of those 68, the Government is deciding to retain one, to partially retain three others, but to completely divest another 64 properties. And, in fact, three of those have already been divested. But to properly understand this, we need to have a sense of the dollars which are involved in this. Over the last four years, we have spent $4 million maintaining Spectacle Island in Sydney Harbour, which does not have a single Defence Force personnel on it. In the last six years, we’ve spent a million dollars dealing with vandalism and theft in respect of the Penrith Training Depot — a property that was vacated in 2016. And indeed, the estate audit estimates that if we do nothing, we will be spending $2 billion over the next 25 years in respect of such properties, without a single contribution to defence capability. And that is clearly unsustainable. And yet, on the flip side, the divestiture of these properties represents the opportunity to return billions of dollars to the Government’s purse. Now, the mechanism by which we will be pursuing this divestiture is, over the next couple of years, transferring these properties to the Department of Finance. And from there, the Department of Finance, as the Government’s asset management specialist, will be responsible for the divestiture of the properties. Some of them will happen quickly, but some of them will take years in order to properly divest, and the Finance Minister will be able to speak to that. But this mechanism allows Defence to realise the benefits of this divestiture in a timely way, while also giving the Commonwealth the space it needs to maximise the return from these properties. Now, some of these properties are very significant in terms of their heritage value to Australia. I particularly refer to Victoria Barracks Brisbane, Sydney and Melbourne. In many ways, the Australian Defence Force begins its life pre-Federation at Victoria Barracks Sydney. But I also want to make clear that the heritage value of these properties does not belong to the Australian Army or, for that matter, the Australian Defence Force. It belongs to the Australian people. And right now, the Australian people are prevented from seeing these properties. They exist behind a Defence wall. The War Cabinet Room in Victoria Barracks Melbourne is a room in which some of the most significant decisions were taken around our nation’s independence back in 1941. I’ve seen that room, but the public have not. Now, these properties are protected by law with heritage overlays, and they will exist whatever their future use is. But being opened up and being allowed to be seen by the Australian people is a tremendous heritage outcome, because it returns the heritage value of these properties to the nation. And that is a very important point to understand about them. Today’s reforms will finally see the Defence estate focused on providing the proper foundation for the Australian Defence Force to do its work in defending Australia and in keeping Australians safe.

PETER KHALIL, ASSISTANT MINISTER FOR DEFENCE: Thank you, Deputy Prime Minister. Over the past eight months since I took on the role as Assistant Minister — and obviously Assistant Ministers get all the hard work — I have visited dozens of sites, dozens of defence bases across the country. But I’ve benefited from the fact that I’m following through on the great work — the terrific work — in completing the audit that was done by Jim Miller and Jan Mason. I thank them for their work, and I thank my predecessor, Matt Thistlethwaite, for the work that he did on the audit as well. But fundamentally, that follow-through work was to really look at the Defence estate to make sure it was fit for purpose. Simply: do these defence bases contribute to our ability to defend Australia, and do they contribute to our national security and defence challenges that we face as a nation? Now, the DPM mentioned Penrith. I visited Penrith recently. I was absolutely shocked at what I saw. I stood — even before I went in — at the gate, the barbed-wire gate, and behind that gate I saw abandoned buildings, every window broken, glass strewn everywhere, vandalism and graffiti. And it got worse when I walked in. There was rubbish strewn everywhere. There have been fires lit there. And as the DPM mentioned, we have spent a million dollars sustaining that site. Not far from there, on Spectacle Island, which has not been used since 2023, we’ve spent $4 million on security and safety to maintain that particular site. That is a shocking waste of taxpayer dollars, and I know the Australian taxpayer would agree. In fact, they are just two of around 14 sites that have been identified that are not being used and that we are spending hundreds of millions of dollars to maintain and sustain. That’s unacceptable. Now, on the other hand, there are some defence sites that are very beautiful. There are some that have grass tennis courts that rival Wimbledon, manicured lawns, sprawling golf courses — but they are also not meeting the operational and capability requirements for our ADF. We promised to ensure taxpayer dollars aligned with defence spending are actually aligned with the public’s expectation of efficiency. And that’s exactly what we’re doing with this very important reform. Our defence estate must be fit for purpose. It must meet the operational and capability requirements for our serving men and women, and it must be an efficient use of taxpayer dollars. So consolidating the defence estate footprint is long overdue. That’s why we are making this tough decision — and making these tough decisions — today, to divest 68 defence sites, 67 defence sites, partially or in whole. And as a result of that divestment, as the DPM has noted, Defence is expecting savings of around $2 billion that would have otherwise gone into maintaining and sustaining sites that are not used or are derelict. And really importantly, as the DPM mentioned, every single cent — every single dollar — of those savings from the proceeds of sale and the money that we save is going to be reinvested in defence capability, in the necessary defence infrastructure and the kit for our men and women in uniform. Now, we understand that defence sites are steeped in history. Many are steeped in history and tradition. Some hold great historical value and are a reminder of our past sacrifices and achievements of our military. And we know the estate plays an important role in the lives of Defence personnel and the broader community. And that is exactly why a big part of this reform is to enhance the public’s access to these sites so they can also enjoy that proud national history that is part of all of us. These reforms are literally a once-in-a-generation opportunity to consolidate and reposition the defence estate — to ensure it meets operational and capability requirements, to ensure that we spend our taxpayer dollars efficiently, and to ensure that we’re able to meet the national security and defence challenges — the strategic challenges — that we face as a nation. The commitment made by this Government to do this was not an easy one. It has taken decades, and nothing’s been done. But we are delivering on that commitment today. Thank you.

KATY GALLAGHER, MINISTER FOR FINANCE: DPM, Peter, and Jan and Jim — thank you for all the work that’s gone into this. I know a huge amount has, and really I’m here as Minister for Finance at the beginning of Finance’s job in relation to this. But just to supplement what the DPM and the Minister have outlined, Finance will now become responsible for 58 of these sites that have been identified through here. So that’s essentially the ones that we aren’t retaining or partially retaining, or that Defence isn’t managing now under a divestment program. So those — it makes sense. Cabinet and ministers have obviously had a long think about it, but for Finance, we manage the non-Defence property divestment across government. So this aligns with that piece of work. Obviously, there’s going to be a huge amount of work done as sites become available to be transferred to Finance, and then work will need to be done on assessing the sites for divestment and appropriate use and all of that. Consultation will be an important part of that. I know there will be a lot of interest in these sites. Finance is used to managing all of that. A team is being put together in the department. This is obviously a priority for the Government, and a strategic industry partner will be worked through all the due diligence and integrity processes that need to sit around it. But Finance’s job is really just beginning after all the work that’s been done by everyone up here and across the Department of Defence, and we will continue to work with the DPM, his team and the departments around that as well.

MARLES: Thanks, Katy. So, questions — and Jim and Jan are welcome to take questions as well.

JOURNALIST: Minister Marles, over decades, various attempts have been made to try and divest some of these properties that come up against security concerns, sound concerns, environmental heritage, various things. Have you factored in how to get around some of those problems? And also, how is progress on the Henderson site in WA in terms of defining the boundaries there?

MARLES: Well, perhaps to answer the second question first, progress is going well there. We are working with various consultants in respect of how best to use the Henderson strip to establish the Henderson Defence Precinct, as we are working with the Western Australian Government, and we really are working hand in glove with the WA Government in respect of that. So you’ll hear announcements from us from both governments jointly in respect of that in the not-too-distant future. I suppose, in respect of your first question, I think the estate audit says it — what we have seen over the journey is an inability to move on the defence estate because, as the audit says, a lack of organisational and political will. But from our perspective, the circumstances that our nation faces today, in the world that we face today, demand that we make difficult decisions, and we are absolutely determined to do that. Now, the mechanism by which we are proceeding here — which we’ll see in a relatively short period of time over a couple of years — is all of the properties being transferred to the Department of Finance, and then Finance taking the time it needs to go through the full divestiture. Some properties will be relatively easy to sell; others will take a lot of time to sell. I think this is a mechanism which enables us to deal with the challenges that you have just said. And of course, what it then does is also enable every cent that is recovered through the sale of these properties to be reinvested in defence. And that is a critical part of the announcement that we’re making today.

JOURNALIST: Minister Marles and Gallagher, can you say a bit more about what the guiding principles will be for what happens to these sites? And will, for example, housing be a priority, given how much the Government talks about how important it is to increase housing supply, particularly in the big cities?

MARLES: Well, I’ll get Katy to answer more fully, but again, maybe just to deal with the latter part of that question. You know, some of this land is very strategic, and I expect that housing will be part of the opportunity that is created here. But I want to be really clear — that’s not why we’re doing this. This is around making sure that we have a Defence estate which is properly attuned to the capabilities of the Australian Defence Force, and that we are not wasting money on properties which give no capability benefit to the ADF. That is our laser focus here. And in that sense, the fundamental benefit that we see coming from the divestiture of these is the reinvestment of money into the Defence Force. That means that, as the Minister for Defence, I want to see maximum value here. So I think that will be one of the guiding principles. But really, this will then be a matter for the Department of Finance.

GALLAGHER: So the short answer is: none of those decisions have been taken. The decision where Finance kicks in is the divestment — the land is coming to Finance. Then there will be a piece of work done about what is the most appropriate use on those sites, and it will be varied. I mean, there are some prime locations. I imagine there will be a lot of interest and a lot of views about what they can be used for. But the reality is we will work through those site by site. It may be that some sites are suitable for housing. Obviously, other sites will have contamination, heritage restrictions, or other issues that need to be worked through. But as you know, we want to maximise the opportunity here because the Department of Defence — and Richard has just outlined — needs continued investment into operational capability, so we need to maximise the use of the sites as well. You know, I’m hopeful some of that would be for housing, but it really is to be determined, and no decisions have been made.

JOURNALIST: Have you consulted the key stakeholders around some of the more strategically located properties, including all three Victoria Barracks? And what’s your plan to deal with objections around the sale of those? And what do you think those three key properties could become?

MARLES: Perhaps partly the way to answer that question is in the time it’s taken actually to respond to the audit. The audit was provided to us at the end of ’23, and it actually was a very significant piece of work, which became very clear once we started reading it, and has resulted in a lot more work for the Government in terms of digesting this than perhaps we first imagined. A key part of that has been consulting with the stakeholders that you’re talking about. So we’ve spent the last couple of years in a thorough process of speaking with people across the defence community, but also a number of community organisations which access some of these sites, to manage those issues. In terms of what those particular sites might become, I wouldn’t speculate on that. I mean, they’re not strategic from a defence point of view, which is the point here. But they are iconic properties in the context of Brisbane, Melbourne and Sydney, and so I think we need to make sure that there is the proper time and space to get the best outcome in terms of the use of those properties. And that’s why we’ve come up with the mechanism we have — of these being transferred to Finance relatively quickly, but then giving Finance the opportunity to take all the time it needs.

JOURNALIST: What about the National Trust, though, with the RSL — that type of thing?

MARLES: In terms of the heritage overlay, that’s a matter of law. So these are properties that will be protected because they are protected right now. None of that changes, and that’s a really important point to make. They are protected by law. But the point I made earlier is this is a great heritage outcome, because Australians actually get to see it. And this is Australia’s heritage. It’s not the Army’s heritage — it is Australia’s heritage — and Australia will now get to see these critically important and beautiful properties.

JOURNALIST: You must be concerned about opposition or objections from the defence community and people who have worked at these sites for a long time, or who are concerned about their link to defence.

MARLES: Well, as I say, we’ve gone through a very significant consultative process. I think one of the things that’s really clear is that anyone who’s worn our nation’s uniform understands the fundamental purpose of the Australian Defence Force. We’re not a heritage organisation — we’re a defence organisation. And people who wear the uniform are fundamentally focused on defending our nation, and they absolutely get the argument that spending a whole lot of money on properties which have no benefit to our capability makes no sense. And the essence of the narrative in the Defence Strategic Review about investing in our northern bases, but also in the west, is really fundamentally important, and we need to be doubling down on that. And as a government, we are. But we need to in every sense, and that does mean tackling difficult, thorny issues which governments in the past have shied away from. But we are going to meet this challenge, because the circumstances at this moment demand it.

JOURNALIST: You mentioned that a couple of times that this is the heritage of Australians, not the heritage of the Army. You mentioned that a couple of times. Are you getting pushback from the Defence Force about this matter because they love their offices and their facilities? Has that been an issue as part of this process?

MARLES: I think it's fair say, and it's understandable that those who have served in the Army feel very passionate about the Army, and that's completely appropriate. People will have emotional attachments to places they've served and to buildings which have historic significance, and we understand that as well. But in answer to the former question, or previous question, people who wear our nation's uniform get the purpose of the Australian Defence Force. So as we have gone around explaining what we are trying to do here and dealing with an issue which has been put in the too hard basket for decades, actually, we have been welcomed in facing up to this so that we do have a Defence estate which is the foundation for what Defence needs to do, and that's defending Australia. People who join the Defence Force, people who join the Australian Army to wear the uniform of the Army, do so because they want to defend Australia and people absolutely get the need for the estate to be finely attuned to what the Defence Force is seeking to do.

KHALIL: Can I just add to that. The many conversations that Richard's had, obviously, with the military leadership and uniform personnel, and I've had many conversations – it goes to that very important point, when we talk about the operational capability of that particular base: what is here and what is unique to this site? And if it's not meeting those operational capability needs, it's not meeting our strategic needs. And I think the importance of the historical legacy, the historical buildings, we understand that. Actually, this reform allows us to open that up to the general public in a way it hasn't seen for decades.

JOURNALIST: Minister, you concede that this has been in the too hard basket for decades for repeated governments. I also note that we're more than two years from the release of the Audit to even making a press conference. What's the end date where Australians can say the Defence Force only has property that it needs to do its job? What's the finish date on this?

MARLES: Well, it's more than a press conference. I mean, we are doing that today, but what we're announcing is the Government's response to the Defence Estate Audit. And it has taken time because it has been difficult. Like, this is a challenging issue and it has taken, to be honest, more time than I expected to work through all the issues associated with this. I mean, we've talked about consulting stakeholders, but there's a whole– I mean, there are personnel implications in this, in terms of where personnel might move, and we've needed to work through all of those issues. But in the context of this having been sat on for decades, actually, the time that we've taken has been important over the last two years to get this right. In answer to your question, I mean, it is the intention to transfer these properties to the Department of Finance over the next couple of years. It's in that timeframe now that we will have a point that we will have a situation where the Defence estate is entirely focused on the work of the Defence Force. Two years. 

JOURNALIST: What impact has recruitment played in this? In the WA context, it's moving the Irwin Barracks in a very affluent Western Suburbs area out to the outer suburbs, where there is typically cheaper housing. Has workplace housing played a factor in this? 

MARLES: Not really, and it's– so pathways into the Defence Force is an important part of the story of what we are announcing today, because a number of the properties, and I'm not sure that is specifically one of them, but a number of the properties have been used for Reservists, for example, or Cadets, and they are important pathways into the Defence Force. Again, and then, you know, to go to Ben's question earlier, there's been a lot of consultation with Cadets and with reserve community about how we can be doing that function better going forward. And we are really confident that actually the rationalization of the Defence estate that we are now talking about will provide for better facilities and better opportunities for the Reserves to do their work, and for us to offer a Cadet program to young Australians who have an interest in the Defence Force. So, that's the degree to which this relates to recruitment. It's not really about locating Defence properties in particular areas in respect of where we might see recruitment.

JOURNALIST: Minister, on page 62 the report identifies the importance of identifying an East Coast nuclear submarine facility. Has there been any progress made on identifying that location?

MARLES: Look, it's in the Defence Estate Audit. It's also in the Defence Strategic Review. And when we announced our response to the Defence Strategic Review, we accepted the need for an East Coast base in the fullness of time. But really that is being articulated in the context of us having the full nuclear‑powered fleet in the 2040s. And so this is a way off in terms of needing to make a decision as to where. Obviously, work continues but really, as we walk down the optimal pathway to acquiring a nuclear‑powered submarine capability, and an East Coast base is a part of that, we are taking it a step at a time, and that step is one which is, frankly, in the 2030s. 

JOURNALIST: A previous analysis by ASPI has found that these Defence divestments don't really raise as much money as projected, because costs are just always higher. How confident are you that this will yield $1.8 billion for taxpayers?

MARLES: I don't think ASPI is making an argument that the most cost effective process here is to leave the Defence estate as it is. It matters that we are not wasting money on properties that have no value, and so that is money that we will save straight away. We are confident that there is going to be some realisation of money to the Defence budget as a result of the sale of these properties, and that will be significant. But just as significant, if not more, is saving the money of not spending them on properties that we don't need. But it's also the people. This will create a whole lot of opportunities to better focus the energies of our people, so that they're not spending time on managing properties that don't matter to Defence, but also in terms of where Defence personnel are based, so that they are, in turn, able to be in more fit‑for‑purpose premises. I mean, when we're talking about Victoria Barracks Melbourne and Sydney, for example, what those sites are used right now for is largely office work. They're old buildings, which are not particularly suitable to do that. We have Defence Plaza in Sydney, which is only at 40% capacity – it's 60% empty. We have Defence Plaza in Melbourne, which is 46% used – 54% empty. These are fit‑for‑purpose office buildings which are built to do office work. It is the opportunity to have people in much better surroundings, which will enable the work that they do as members of the Defence Force. And that's the real opportunity that comes from the reform that we're engaging in.

JOURNALIST: Minister, thank you. When can we expect a decision on who will replace Greg Moriarty as the Secretary of Defence?

MARLES: So we'll make that decision in the in the fullness of time and I'm not going to put a time frame on it. I mean, the only point I would– well, let me say a couple of things in relation to that. Firstly, Greg has been an incredible servant of the nation as the Secretary of Defence, and I am deeply indebted to all the work that he has done. Hugely grateful. He was obviously the Secretary of Defence when I became the Minister for Defence, and I've worked very closely with him over the better part of the last four years, and he obviously served as the Secretary of Defence under the former government as well. He is really– the contribution that he has made to our nation has been exceptional and he is an excellent appointment as our next Ambassador to the United States. And I know that he will continue to build on his excellent achievements for our country in that role. The Secretary of Defence is a critically important job. Like it really is. And I mean, I'm obviously going to say that as the Minister for Defence, but I think if you speak to anyone around this town, they will look at that job as one of the most significant jobs within the Australian Public Service. It will matter that we get that we get that appointment right, and we're going to take the time to get that appointment right.

JOURNALIST: Minister, just a couple of questions on logistics for this, and this might be one for Minister Gallagher, I'm not sure. When will these properties that have been sold off, presumably, at some point the staff will have to leave. When is that going to happen? And when will Finance take over these properties? And will there need to be additional public servants brought on in Finance to manage the sale well?

MARLES: I'll ask Katy to add to this answer as well. The reason that we can't sign a piece of paper and put it all in the hands of the Department of Finance this afternoon is precisely to deal with the issues that you raise in your question. There are deployment cycles, and posting cycles, and we are seeking to work in the context of them. One of the, I guess, the burdens of service is that people are posted and move, and Defence personnel are very much experienced at that. But we are working through the transfer of these properties from Defence to Finance in the context of posting cycles to minimize the disruption associated with that. So that is a key issue, as is working, in some instances, with a range of community organisations which might operate from various sites. So that is why we're taking the time to do that. But we are confident that we will be in a position to have all of those properties transferred to the Department of Finance over the next couple of years, and that then, you know, gives Finance the space it needs to take the time it needs for it to maximize the value in the way in which it goes about its divestiture. 

GALLAGHER: So we are expecting, as the DPM said, a staged transfer. So some properties would be easier than others for the constraints that the DPM has just outlined; personnel, other tenants and things like that that that need to be worked through. Finance has a commercial division within the department. There will be some additional ASL, it's pretty limited. So some additional resources to manage this piece of work specifically. But we have a division that already does property disposal now, and you'll be merely supplementing that and working on each, I guess, the staged transfer of that land.

JOURNALIST: You mentioned public accessibility. Will public accessibility be a condition of sale for heritage listed properties?

MARLES: Well, firstly, the heritage values of the properties are enshrined in law. So I want to reemphasise that. I mean, it's more than a condition of sale, there is a legal protection of these properties right now, as there will be, you know, going forward. I mean, I'm not going to speculate on what the future of those properties are, but the current use of those properties prevents any public access, really, to see what are properties that are hugely important in terms of our nation's history. So whatever the future use of them is going to be, it is going to be a better heritage outcome in terms of returning that heritage to the nation.

JOURNALIST:  Minister, as Deputy Prime Minister what's your obligation to Australian citizens in Syrian camps now that Kurdish forces have withdrawn? And has the US advised Australia if they've been redirected or transferred to Iraq? 

MARLES: We obviously maintain an awareness of those sites and those camps and the presence of Australians in them. We do that. But you know, I mean, this is a matter which has been answered extensively by the Minister for Home Affairs and by others, and really, I'd fundamentally leave it to them to go through that answer in more detail. But we are not providing assistance to people in those camps in terms of return to Australia, and we maintain awareness of Australians there, as we do maintain awareness of all Australians in the context of the security of this country. 

ENDS