Updated ,first published
A dramatic sale of $3 billion worth of defence real estate – including some of the nation’s most historic barracks – is set to open up opportunities to build new inner-city homes, as the Albanese government vows to stare down opposition to the sell-off.
Veterans groups and heritage advocates have reacted warily to the divestment plan, which they warned could undermine the military’s presence in the country’s biggest cities and hamper defence recruitment.
Islands, golf courses, rifle ranges, office buildings and training depots across the country will be sold under the Albanese government’s long-awaited response to a sweeping audit of the defence estate portfolio.
Almost $2 billion is expected to be ploughed back into new military equipment and upgrades to essential bases when the sales are complete.
The release of the government’s response to the audit was delayed by over two years as it braced for blowback from veterans and local communities to the sale of some of the country’s most iconic defence facilities.
This masthead revealed on Wednesday that the Victoria Barracks sites in Sydney, Melbourne and Brisbane will be sold, freeing up prime land in inner-city areas.
“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,” Defence Minister Richard Marles said.
“And right now, the Australian people are prevented from seeing these properties, they exist behind a defence wall.”
Acknowledging the long delay between receiving the audit and releasing a response, Marles said: “It has taken time because it has been difficult. This is a challenging issue.”
Sixty-seven defence sites will be fully or partially sold – including the birthplace of the Royal Australian Air Force in Victoria and the army’s headquarters in Sydney – by the Department of Finance, with an estimated sale price of $3 billion.
Relocating staff and remediation works ahead of sale could cost as much as $1.2 billion, meaning net proceeds of up to $1.8 billion are expected from the divestments.
The government also expects to save $100 million a year by reducing maintenance costs.
All the money raised from the sales, which are expected to take years to complete, will be reinvested into defence.
RSL national president Peter Tinley said: “The government needs to tap the brakes here. Take a breath. Because once these sites are gone, they’re gone forever.”
Tinley said veterans understood the need to modernise the estate portfolio, but asked: “First, where do the cadets and reservists go? Many units rely on specific sites for training and community presence. Selling the real estate before sorting the people is putting the cart before the horse.”
Retired army major-general Mick Ryan said it was a “terrible mistake” to sell the Victoria Barracks sites, accusing the government of a “cheap money grab” instead of appropriately funding the military.
“I think there will be a very substantial backlash from lots of communities,” he said.
By contrast, City of Sydney councillor Zann Maxwell, who spearheaded a push to sell off Victoria Barracks in Paddington, welcomed the “very exciting” news.
“The government has made the right call,” he said. “This is 15 hectares of extraordinary land locked away in the middle of a dense global city, at a time when Sydney desperately needs public space, cultural venues and housing solutions that respect heritage.”
Business Western Sydney executive director David Borger applauded the proposed sale of Lancer Barracks, saying: “In a CBD dominated by towers and hard surfaces, this site offers a rare chance to introduce greenery, shade, breeze and breathing space right in the heart of Parramatta.”
Asked about the scope to expand the supply of housing by selling defence sites, Marles said: “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 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 property which gives no capability benefit.”
Finance Minister Katy Gallagher said the asset sales would be decided on a case-by-case basis.
“I mean, there are some prime locations. I imagine there will be a lot of interest and a lot of views about what it can be used for,” she said.
“I’m hopeful some of that would be for housing, but it really is to be determined, and no decisions have been made.”
Assistant Defence Minister Peter Khalil said he was shocked to recently visit a vacant training depot in Penrith, in western Sydney, which had cost $1 million over six years to maintain but was strewn with rubbish and covered in graffiti.
Meanwhile, he said, some salubrious facilities “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”.
Opposition defence spokesman Angus Taylor said: “We must not sell off assets that directly support the recruitment, training and retention of ADF personnel just to cover up Labor’s failures on housing.”
“Any sell-off must pass a hard national security test. Labor’s fire sale risks leaving our warfighters ill-equipped and unsupported, and that is simply unacceptable.”
Greens defence spokesman David Shoebridge said: “Victoria Barracks could house hundreds of families in real public homes, flogging it for luxury private developments would squander this opportunity.”
Linda Bergin, a Sydney heritage advocate, said: “This is hardly a good deal for the people of Australia and a great loss to future generations. These sites belong to the people, not the government of the day.”
Australia Defence Association executive director Neil James said: “I think it’s sad. This idea comes up repeatedly and quickly runs into problems. I fear there will be a long-term impact on recruitment and retention.”
The audit, conducted by former Defence Housing Australia managing director Jan Mason and Infrastructure Victoria chair Jim Miller, found the defence estate is riddled with waste and tough decisions were needed.
“It is very clear and widely acknowledged that Defence does not need and cannot afford all of the current estate,” Mason and Miller wrote in their report, delivered to the government in December 2023.
“Underutilised portions of the Defence estate are draining resources from higher-priority needs. Sustainment budgets as they relate to this part of the estate are stretched too thinly, resulting in critical failures and costly unscheduled repairs.”
The auditors acknowledged that their recommendations “are likely to evoke strong emotions associated with its history, scale and diversity”.
In NSW, the sites to be sold include:
- Victoria Barracks, Paddington
- Lancer Barracks, Parramatta
- HMAS Penguin (partial sale)
- Randwick Barracks (partial sale)
- RAAF Glenbrook
- Spectacle Island
In Victoria, the sites include:
- Latchford Barracks
- Newland Barracks
- RAAF Williams, Point Cook
- RAAF Williams, Laverton (partial)
- Defence site Maribyrnong
- Victoria Barracks
In Queensland, the sites include:
- St Lucia Training Depot
- Mount Isa Rifle Range
- Victoria Barracks
In Western Australia, the sites include:
- Irwin Barracks
- Leeuwin Barracks
Matthew Knott is the foreign affairs and national security correspondent for The Sydney Morning Herald and The Age.Connect via X, Facebook or email.
