Radio Interview, 2GB Afternoons

Subjects: Defence Estate Audit, Divestment of Victoria Barracks Sydney 

MICHAEL MCLAREN [HOST]: As you know, we've been trying for months to get anyone from the Albanese Government on the show to discuss the plans to sell 67 defence sites, one of which has now already been sold at Penrith. As I've said from the very beginning, I am not opposed to the sale of some of these sites. Some do offer very little economic, strategic or historic value. But among the list of assets up for sale are also some of our most important Australian Defence Force holdings. And chief among those, in my opinion, Victoria Barracks in Sydney. Now, we've heard from numerous current and former Defence members, politicians across the spectrum, including Labor politicians, business leaders, locals and experts, all of whom have lined up to do one thing, and that is oppose the sale. We've even heard of the historical, the economic, the strategic, the national security value of retaining Victoria Barracks within the Defence portfolio. We've heard of the nearly 200 year continuous living link to our military history, of the soldiers who marched out of those barrack gates and into theatres of war, including Gallipoli – of course, some of them never to march back in and return. Nearly 20,000 of you have signed our petition to save Victoria Barracks from sale. The Shadow Defence Minister, James Paterson, well, he's got his own petition and that's to save all three Victoria Barracks. There's also one in Melbourne and Brisbane. That one has accrued over 52,000 signatures. Passions are high and we have heard time and again just how much Victoria Barracks means to many, many Australians, even those that don't have defence blood. Well, I am pleased to say today we're going to hear from a member of the Government about this. Peter Khalil is the Assistant Minister for Defence. He's been good enough to join us before Question Time. That gets underway, of course, at 2 o’clock. He's in our studio in Canberra. Peter, thank you very much for being there.

PETER KHALIL [ASSISTANT MINISTER]: G'day, Michael. Thanks for having me on. And I would say probably I'll get maybe tougher questions on this program than I might get in Question Time, but I welcome it. 

MCLAREN: No Dorothy Dixer here, I'll give you the guarantee. 

KHALIL: You're not going to get any of those on your program. But I should say it might be that you were being a bit cheeky, but I heard last week you said I was running scared. We only got a text message to my office to come on your program an hour before you went on air. So, I'm certainly not running scared. In fact, I've gone out and met with stakeholders, with veterans, with Defence personnel, with community members across Australia, and to answer their questions about what is a very important reform. I thank you for pointing out that there is a reason that we have to actually make sure that our Defence estate is fit for purpose, it's operational, it has the critical capabilities necessary for the current and the future force structure. And to make these tough decisions – they're hard decisions, Michael, and that's why governments of both persuasions have avoided this for decades.

MCLAREN: Ok, hard decisions, but doesn't mean they're the right decision. Now, you've got, as I said, NSW Labor politicians, former Liberal Prime Ministers, former Labor Prime Ministers, RSL figures, you've got independent MPs, you've got business leaders, you've got military experts and strategists. They're all lining up to say one thing to me, and that is, sure, out of that 67 portfolio, there's probably 50 or 60 that, no trouble, sell them off. But there's a few that are not just strategically valued, but – and this is very important with traditional institutions like Defence – are also deeply rooted in tradition and history. Now, Victoria Barracks Sydney is the Everest of that mountain range. So, why are they all wrong and the government is right to sell it?

KHALIL: Well, there's a lot of views around this and I'm glad you raised the issue around tradition and history, because for me, that is one of the most important elements of this reform. And in fact – and look, there's a fair bit of misinformation out there and that's why I've gone and done town halls in front of hundreds of people to answer all their questions. The Defence Strategic Review, which was authored by Sir Angus Houston and other eminent scholars, were very explicit in their recommendations that we need to address the Defence estate to make sure it's fit for purpose. Now, the sites that you mentioned, there's about 50 that are underused, are utilised. But there are other sites that have beautiful, sprawling golf courses and tennis courts that rival Wimbledon, but they're not fit for purpose. They don't have critical capability that meets the needs of our, the operational needs of our current site.

MCLAREN: Yeah, but you and I aren't talking about those. Let's focus on Victoria Barracks. No golf course there.

KHALIL: Yeah, well, I'll talk about Victoria Barracks Sydney and Victoria Barracks Melbourne. They have great historical value and in fact, many of these sites are not accessible to the Australian public. That history is not accessible. The Army Museum that is amazing at Victoria Barracks Sydney is open a couple of hours every third Sunday and once a fortnight on a weekday. Victoria Barracks Melbourne, which is the other one – the war rooms where John Curtin met with MacArthur and Blamey and made consequential decisions about the future of this country in the midst of World War II, is not open to the public, although it's pristinely kept. I have to write a letter to let individuals go and visit it. I want these places to be seen and accessed by the Australian people because they understand our military history, our nation's military history, but also understand what our ADF are going through now.

MCLAREN: Ok, why couldn't that happen with it remaining in Defence hands?

KHALIL: Because it is an operational, it currently has the security status of an operational base. But there are other reasons, by the way, for Victoria Barrack Sydney. Let me be really clear for listeners, everything that's heritage – and there is Commonwealth heritage laws which protect the heritage listed buildings and features and at VBS Paddington, which are critical to our history and understanding our history – that is going to be protected. People running around saying we're going to bulldoze heritage buildings, that's absolute rubbish and misinformation. That is not the case.

MCLAREN: I haven't made that claim because it’s rubbish.

KHALIL: No, no, I'm not saying you did, Michael. Some people. Michael, I just want to make the point, though. 

MCLAREN: The real issue here, and you know this, isn't whether the public can wander through Victoria Barracks and look at the silverware. The real issue is the strategic value of this site. Now, you just said to me there that Victoria Barracks has the security status of an operational base. In other words, people are there. 

KHALIL: Yeah, that's right. 

MCLAREN: In other words, it's not just some historic, dusty vestige of the past. It's used and it's relevant. Where would, for example, the Black Hawk helicopters land in central Sydney if we were to turn this over to developers in the case of either a terrorist event or, heaven forbid, we hold an APEC or something like that?

KHALIL: I'm really glad you asked that question, Michael. You're right on the money on this, because the counterterrorism capabilities, and the launch capabilities and staging, occur out of Randwick and Holsworthy and VBS, but they’re largely out of Randwick – sorry, largely out of Holsworthy and Randwick.

MCLAREN: Isn't part of the plan to sell Randwick as well?

KHALIL: No, that’s partial. But, the other point I would make about this is that even when the Lindt Cafe siege happened, staging came out of Holsworthy. That's where our counter terrorism capabilities is largely at. It's not out at VBS Sydney. The other point about Paddington is that it's largely administrative and office jobs there. There's a medical unit and some other units that are there that are important, but not that they can't actually conduct those functions and those tasks at a more appropriate base. And so, these are hard decisions. I understand the history, the importance of the history of Paddington to our nation's military history. That's exactly why I want to make sure that it's accessible to the Australian people to see that. And they're not wandering around. We're talking about people understanding our nation's military history and the commitment that ADF men and women make. And in fact, part of this process is really to ensure that the current and future force forces have the infrastructure and the capability that they need to do their job. We are in the most volatile circumstances globally I think for decades, certainly since World War II. And the question is what to do about this. We can sit on all these bases that are not functional, that are not providing that capability, or we can make the tough decisions and ensure that the funding goes to kit, it goes to equipment, it goes to our men and women in uniform, it goes to ensuring we protect the heritage of what are historically important sites. And that is exactly what we're going to do with Paddington. No decisions have been made, frankly, about the future use of the site. That is open. What has been made, Michael, the decisions that have been made – on the back of an audit that took a couple of years, on the back of recommendations made by the Defence Strategic Review – is a decision by government that these 67 sites are not fit for purpose for the future force capability and critical capability that's required.

MCLAREN: That's right. But we're being told that if you sell them as a portfolio, you raise what, three point something billion dollars. Now the bulk of that money will come from sites like Victoria Barracks because of where it's located and the potential developer return on investment. So, okay, sure, there's no, there's no plan yet, but I mean, who would pay top dollar for Victoria Barracks if not a developer?

KHALIL: To be really clear, with all of these sites, as I said, the decision has been made that they are not fit for future use or fit for purpose for our capability. But with all these sites, the future proponents and the use of the site is dependent upon a number of factors. One, the Heritage plan which I'm overseeing, making sure that the protections under Commonwealth laws of all of these significant heritage sites is watertight. And that's what we're doing right now. The EPBC, the environmental obligations as well and the transition of personnel. You mentioned earlier about, oh well, what do they do there? Well, there's a Defence Plaza Sydney, which there has been an investment of some, over $80 million. It’s state of the art facilities. We're talking about the security networks and other things that the cabling and everything has to go there, which you can't actually do as effectively at Paddington because of the historical nature of those buildings and the cost. We are spending hundreds of millions of taxpayer dollars Michael, people listening, hundreds of millions of dollars on sites that are not fit for purpose. That is unconscionable.

MCLAREN: But you're also spending a lot of money renting Defence Plaza. You own Victoria Barracks.

KHALIL: Yeah, well, the economics of that, the investment in Defence Plaza economically makes way more sense than spending hundreds of millions of dollars on Paddington going forward when it doesn't fulfil a critical capability.

MCLAREN: Well, OK, just hang on just one moment. When you say spending hundreds of millions on Paddington going forward, I mean, I know about forward estimates, but I mean, how many multiples of forward estimates are you applying?

KHALIL: I'm talking about, we've spent $50 million in relation to maintenance of VBS. 

MCLAREN: Over how many years, how many years? 

KHALIL: Over $200 million is extrapolated that we'd have to spend over the next decade at Paddington on maintenance and sustainment because of the historical nature of the site. And, and also the point I would make is – 

MCLAREN: And how much you're going to spend renting Defence Plaza and retrofitting it over those same years.

KHALIL: A lot less than the outlet of that. 

MCLAREN: How much less? 

KHALIL: So, I can come back to you on those exact figures. I don't have them in front of me, but I can tell you this. The calculations have been done. If you look at the money, taxpayer dollars that have to be spent on maintaining and sustaining a site, which includes ensuring that you have the cabling and all that, it costs more because of the historic age of those sites.

MCLAREN: Well, I'm told you're going to spend $310 million to rent Defence Plaza over 10 years, is that right?

KHALIL: Well I don't know who's telling you that. I’ll come back to you with precise figures, I don't know the exact figures of that.

MCLAREN: That's a lot less than $200 million maintaining Victoria Barracks.

KHALIL: Yeah, but we're talking about the state of the art facilities that have the secret networks and other things that are necessary for people to do their jobs. It's currently sitting at 40 per cent vacancy. That is not tenable either. You need to make sure that we're using the facilities that we have as well. Just to go back to VBS though. I know I've heard these arguments about the counter terrorism capability. I touched on some of that as well. The history part of it is really important as well. And that is making sure that that is protected and maintained. And the Australian people can engage in that.

MCLAREN: And I appreciate that.

KHALIL: Which they can’t. I mean, how often do you walk through there?

MCLAREN: Well, I haven't and I suspect most Government ministers haven't either.

KHALIL: Well, I have. 

MCLAREN: Well, you have, but so you should have. Mind you, you know, when we're talking about history, you and I both, I've been telling my listeners very transparently, this idea that the wrecking balls are going to come in and bowl over the sandstone, Georgian – that’s not gonna happen. But again, the government is saying this is essentially a financial debate that we are having.

KHALIL: No, no, no, no, no. Let me correct you on that. It's not a financial debate.

MCLAREN: Well, it is. You’re saying you’re going to make three point something billion from the sale of the portfolio.

KHALIL: No, don't put words in my mouth, Michael.

MCLAREN: $3.6 billion, I think.

KHALIL: Let me explicitly say to you, because you got me on here live, so I can explicitly say to you, this is not about a financial debate. The money is a secondary thing here. What is important, Michael, is capability. What is important is infrastructure and capability for our ADF.

MCLAREN: Why is the sales pitch from Richard Marles particularly been that we can put affordable housing everywhere, help solve the housing problem and raise $3.6 billion to fund other Defence material?

KHALIL: Michael, I'll be really explicit about that. 

MCLAREN: Well, he was.

KHALIL: It’s to be able to fund, it’s to be able to fund capability that can go – 

MCLAREN: So it is a money debate.

KHALIL: That can go into the hands of our war fighters. 

MCLAREN: Yeah, so that is – that is a money debate! You're selling them to raise the money to put into something over here.

KHALIL: Well, that's your interpretation and what I'm saying to you is…

MCLAREN: And I’m wrong am I? 

KHALIL: Well, I've been doing this for a year, Michael. And the Assistant Ministers get all the hard stuff, by the way. So, when I was given the job, this was the job that I had. I looked at it. I've got a long history in serving my nation in national security roles and in Defence.

MCLAREN: Yes.

KHALIL: Including serving overseas. Okay. My focus, my number one priority is ensuring our ADF have every single capability and every advantage that they can, that we can give them to do their job. They're putting their lives on the line to protect Australia's national interest and defend this nation.

MCLAREN: So, we can't do that. We can't, you're saying we can't do that if we don't sell Victoria Barracks.

KHALIL: You have, as you know, 67 sites that we've identified that are not meeting the critical capability needs of the current force structure.

MCLAREN: Yeah. And you and I are talking about, about 4 or 5.

KHALIL: And it's not just about the money. The money, the financial part of this is one part of it. But it's also important that listeners understand what I'm saying that this is about making sure we have the capabilities and infrastructure for the current ADF. And that doesn't mean that those sites that have the historical legacy are just going to be abandoned or bulldozed, as you say. I'm glad that you say that's not true. It's going to mean also, actually inversely, that people will be able to, it'll be opened up for people to see and understand our military history. And that's important.

MCLAREN: And, and, and for some people to live in among it. Because as I said, only a developer would pay the sort of money you want for this site. No one else, no one else is going to come along with a couple of hundred million.

KHALIL: No final decisions have been made about the future yet. Some sites maybe come national parks. Some sites, state governments are interested. Some sites may be – I'm talking across the country, mate.

MCLAREN: Let's talk about Victoria Barracks. That's what we're talking about. So, who's going to give you say, $300 million for the site if not a developer?

KHALIL: These are complex sites because they will take time to do the work that we're doing around the Heritage plan.

MCLAREN: Is the answer no one but a developer?

KHALIL: I don't – I'm not going to preempt the final…

MCLAREN: It’s not about preempting anything. I mean, you're the one wanting to flog it. You tell me who's going to give you $300 million for the site if not a developer?

KHALIL: I'm not flogging anything. What we're making is decisions to divest sites that are not fit for purpose. Now, you can, we can have this argument in 10 years. I'd love to come on your program in 10 years. And you then look back and say, oh, that's great. This site has been opened up. People are enjoying that Army museum that they never got to see. And our ADF have been given what they need to do their job. Because this is a pretty dangerous world right now, and in good conscience, I can't sit there and look at dozens of sites across the country, no matter how beautiful they are and how much historical legacy they have. And say we keep spending money on them and not spending it on our diggers. Sorry… actually I'm not going to even apologise about that. And obviously not everyone's gonna be happy about that. My responsibility as a member of the executive, as a government and a Member of Parliament and a Minister, is to do everything I can to support our men and women in uniform. And that's what I'm doing. And some people don't agree with it. Some people are making misinformed, you know, putting information out that's not true. And I'm going out and I'm meeting with everyone that I can meet with. I've been to every town and city and done town halls at these sites across the country, and I'll continue to do that.

MCLAREN: Well, I'll say one thing, Peter, you give as good as you get, and that's, that's a bit of praise. Thank you for your time. We will speak again. 

KHALIL: We will. I look forward to it, mate.

MCLAREN: Peter Khalil there, as I said, the Assistant Minister for Defence. 

ENDS