By Matthew Knott
Plans for a major sale of properties from the federal government’s sprawling Defence real estate portfolio have been shelved until next year, and probably until after the election, amid fears of a backlash over the disposal of prime military sites.
The Coalition and the Greens lashed the government for the delay, which comes as it downgrades its ambitious recruitment targets and invests an extra $600 million in incentives to attract more Australians to serve in the military.
Victoria Barracks, in Sydney’s eastern suburbs, is one of the Defence sites that was scrutinised by the audit review.
Defence Minister Richard Marles received a sweeping audit of Defence property last December and planned to release a response in the middle of this year.
Marles now says the government will not act on the audit until “sometime next year”, meaning the government may have sat on the report for more than 18 months before releasing its response.
As well as freeing up money for new military equipment and base upgrades, selling Defence properties and converting them into residential dwellings could help address the nation’s housing crisis by boosting supply in major cities.
The resale value of the Defence estate could be as high as $68 billion if sold to property developers for residential or commercial use, according to the Australian Strategic Policy Institute.
The regency-style Victoria Barracks in Paddington, in Sydney’s eastern suburbs, and the Victoria Barracks on St Kilda Road, Melbourne, are among hundreds of properties that have been examined for possible sale.
In Melbourne, Defence is expected to make a recommendation in early 2025 on the future of 127 hectares of contaminated military land in Maribyrnong, which has been touted as a potential housing development for two decades.
Defence is the largest Commonwealth landowner, with a 3 million-hectare portfolio consisting of more than 1000 owned and leased properties, including military bases, barracks, wharves, ports, airbases, training ranges and storage facilities.
In response to a question in September from independent MP Rebekha Sharkie about the possible sale of Adelaide’s historic Woodside Barracks, Marles told parliament: “We need to be ensuring that all the implications in relation to personnel associated with the thorough review of our Defence estate are completely worked through, and that will take some months to do.
“It is not our intention to respond to the review until sometime next year because of the work that is involved in relation to that.”
Greens defence spokesman David Shoebridge urged the government to divest itself of high-value inner-city Defence properties.
“I’m certain that there are forces in Defence pushing back against releasing any land for other public purposes,” Shoebridge said.
“What on earth is the Defence purpose of holding onto critical public land like Victoria Barracks in Paddington when there are so many other competing public uses for it?”
Victoria Barracks on St Kilda Road in Melbourne.
Opposition defence spokesman Andrew Hastie said: “Instead of making the tough calls, Labor’s Defence estate audit remains unactioned on the deputy prime minister’s desk.
“It has taken Labor nearly a whole year to consider the recommendations of a report that was completed and handed to them in just four months.”
Hastie continued: “If Labor is planning a fire sale of historic and strategic Defence bases and barracks, the Albanese government should be honest with the Australian people.
“We won’t let them sell off our history and heritage without a fight.”
While selling Defence properties would add to the budget bottom line, the government is weighing up potential downsides including hampering the task of recruiting and retaining sufficient military personnel.
The government will release its defence workforce plan on Tuesday, showing it has cut its annual staffing goals over the next four years, beginning by slashing next year’s permanent workforce target to 59,373, down from the 64,532 outlined in the May budget.
“The highly competitive national labour market across all sectors and record low levels of unemployment will continue to put pressure on Defence’s ability to attract and retain the right people,” the plan will say.
To help attract more people to the defence force the government will expand access to a continuation bonus to later career personnel, while reducing the one-off amount from $50,000 to $40,000.
Labor MP Matt Thistlethwaite said in May the government’s response to the audit was scheduled to go to cabinet in late June and that a policy announcement would soon follow, according to an email provided to this masthead by Randwick resident Anthony Ryan.
Ryan said Thistlethwaite, who until recently served as assistant defence minister, told him in a July phone call that the government’s response had since been delayed until after the federal election, due to be held by next May.
“It seems there will be things in there people won’t like so they are waiting until after the election,” said Ryan, who has led local opposition to plans to build apartments at Sydney’s Randwick Barracks.
Thistlethwaite referred to Marles’ recent remarks when asked for comment.
Opposition Leader Peter Dutton attacked the prospect of a “fire sale” of Defence properties when this masthead reported on the issue in February, accusing Labor of “trashing the history of the Australian Defence Force”.
The auditors, former Defence Housing Australia managing director Jan Mason and Infrastructure Victoria chair Jim Miller, were asked to focus on whether Defence’s holdings in high-density urban areas were in line with current military needs.
After visiting 70 Defence sites around the country, Mason and Miller made recommendations about assets they believed were ripe for consolidation, divestment and disposal because they no longer contributed to the military’s war-fighting capability.
The Australian Strategic Policy Institute’s Raelene Lockhorst said she was baffled why the government was taking so long to release the review.
“My question is whether its findings will still be valid in 12 to 18 months,” she said.
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