The Federal government has defended the financial assumptions underpinning its Defence property sell-off after abandoning plans to sell Sydney’s Victoria Barracks and three other heritage-listed sites.
Defence Minister Richard Marles said on November 9 the decision would not affect the budget, arguing the four properties had limited commercial development value because of heritage restrictions.
The broader program covers 67 Defence sites and is forecast to generate $3 billion in gross proceeds, with about $1.8 billion in costs leaving a net return of $1.2 billion.
The other sites were Victoria Barracks Melbourne, Fort Queenscliff, and RAAF Williams, Point Cook, all in Victoria.
However, the decision to retain the four sites in public hands has raised questions about how the government will deliver the forecast return and whether commercial uses can offset the costs of retaining the properties.
Prime Minister Anthony Albanese scrapped the plans to sell Sydney’s Victoria Barracks after backlash from politicians, veterans, and the public, who opposed losing the heritage landmarks.
Shadow Defence Minister James Paterson has challenged the government’s position, arguing Sydney’s Victoria Barracks would have been among the most lucrative properties in the disposal program.
Marles rejected that assessment, saying heritage restrictions applied not only to the buildings but also to the layout of the Paddington site, limiting its development potential.
The government plans to transfer the four properties to the Department of Finance, which will oversee their future use and management.
While Defence will vacate the sites as planned, the government will retain public ownership and explore community access and commercial opportunities to help fund their upkeep.
At Victoria Barracks, most Defence personnel are expected to leave by the end of this year, relocating to Randwick Barracks or Defence Plaza Sydney.
The government has not yet detailed a final management structure or commercial strategy for the 13ha site, leaving the potential revenue from future uses unclear.
Albanese said the property would be opened to the public, with the Australian War Memorial to help interpret its military history.
The government has also confirmed plans for the remaining sites in the first phase of the disposal program, including the transfer of the Angophora Forest at HMAS Penguin to the Sydney Harbour Federation Trust and the return of the Stokes Hill Fuel Installation in Darwin to the Larrakia people.
The wider divestment program remains under way, with 11 sites already transferred to Finance as of November 8.
