By Darian Macey, September 17 2026
Defence’s estate divestment program is facing a substantial challenge from a Senate committee, which has called for an immediate halt and a fresh examination of the case for disposing of the properties.
For anyone working on the Defence estate, the distinction matters: this is a recommendation to stop the program. The report does not itself stop a sale, cancel a relocation or change a contract.
But it does put the reasoning behind the program, and the way it is being delivered, under considerable pressure.
The Senate Foreign Affairs, Defence and Trade References Committee tabled its interim report into the management of Defence estate assets on 16 September. Drawing on 193 published submissions and seven public hearings, the majority report questions whether the government has adequately established that the affected properties are surplus, that displaced activities can be accommodated elsewhere, and that the expected financial benefits will materialise.
The joint release from Senators James Paterson, Leah Blyth and Jess Collins presents that as a demand to halt a reckless sell-off. That is the Coalition’s political framing. The report deserves a closer read because the underlying issues are relevant well beyond the party argument.
The program comes from the Defence Estate Audit, delivered to government in December 2023 and publicly released in February 2026. The government’s announcement endorsed full divestment of 64 holdings and partial divestment of three, with Pittwater Annex retained. Three of the 64 had already been divested. The 67 figure therefore should not be read as 67 untouched, whole bases about to go on the market.
There are also leased properties in the program. Finance’s current description of its responsibility covers 46 owned properties and 12 leased properties. Ending a lease, selling part of a site and disposing of an entire property have very different consequences for occupants and industry. Finance’s program information sets out those distinctions.
The majority’s central criticism is about the order in which decisions have been made. It argues that the government committed to divestment before completing the work needed to justify individual disposals, then consulted communities largely about implementing that decision.
That goes to a basic question for estate planning: what does “surplus” actually mean?
A property can be lightly occupied and still provide useful training space, access to a workforce, room for mobilisation or capacity that would be difficult to replace. Witnesses questioned the consequences of withdrawing from metropolitan locations and reducing Defence’s presence in Tasmania. The committee also challenged whether the audit adequately reflected the Defence Strategic Review’s call to assess the safety and security of foundational infrastructure and invest in it.
Defence’s position is that the nominated properties are not required for current or future capability. The majority was not persuaded that Defence had demonstrated the disposals would avoid harm to capability. That disagreement is at the centre of the report; it is not a settled finding that every nominated property must remain in Defence ownership.
The evidence about cadets and reservists makes the planning problem tangible. The Tasmanian Government told the inquiry that all six of the state’s naval cadet units were earmarked for lease endings, with four having access to the water. Questions about where those units would go were still unresolved in the evidence presented to the committee.
A replacement building needs to support the activity. For naval cadets, that may include water access. For a reserve unit, travel time after work can affect attendance. Storage, training facilities and access to other Defence infrastructure matter too. Consolidation can make sense, but those requirements need to be designed and funded into the receiving facilities.
The financial case is another significant point of contention.
The audit’s original estimates were approximately 3 billion in sale revenue,1.2 billion in costs and 1.8 billion in net proceeds. The interim report records updated Defence estimates of about3.148 billion in property value, 1.275 billion in divestment costs and1.872 billion in potential net benefit. Defence also projected $746.3 million in sustainment savings over five years. Those are forecasts, not realised returns. The figures are set out in paragraph 3.32 of the interim report.
Finance acknowledged that net proceeds could be higher or lower than the original estimate and that it could not yet say when the program would become cash-positive. Site investigations and the eventual disposal arrangements would help establish that.
Anyone who has worked through a complicated property exit will recognise the problem. The sale price is only part of the calculation. Remediation, replacement facilities, relocation, heritage obligations and holding costs can materially change the result. So can the time it takes to complete the transaction.
The report does not establish that the program will lose money. It does establish that the majority was dissatisfied with the financial evidence provided and the ability to test the claimed benefits. Commercial sensitivity may justify withholding a valuation from the market; the committee argues that it need not prevent confidential parliamentary scrutiny.
Its 11 recommendations extend well beyond a pause. They include:
- A baseline security review and a separate independent assessment of the estate’s strategic, heritage, environmental and community values.
- A nationally consistent consultation process before divestment decisions, with affected personnel, governments, veterans and communities involved.
- Support for people affected by the process, and investment in existing cadet and reserve facilities.
- New statutory protection for significant military buildings, parade grounds, memorials and museums, and parliamentary powers to disallow whole or partial divestments.
- More detailed reporting of disposal costs, net returns, recent investment in affected assets and the capability projects funded by the proceeds.
- An Auditor-General performance audit of the Security and Estate Group, alongside greater transparency in estate procurement and decision-making.
That last recommendation is particularly relevant to DECNET readers. The proposed audit would examine centralisation, base services contracting, competition, costs and opportunities for local SMEs. These are proposed lines of scrutiny, rather than announced changes to procurement arrangements. Even so, they show how far this inquiry has moved beyond the property list.
There is no unanimous parliamentary position here. Labor senators’ dissenting report strongly supports proceeding, arguing that an ageing, underused estate absorbs resources needed for modern facilities and capability. They also point to divestments under previous Coalition governments and argue that suitable reuse can improve public access to military heritage.
The Greens support the majority recommendations but put greater emphasis on retaining public ownership and considering housing, community facilities and other public uses where Defence no longer needs the land.
There is a reasonable argument for estate reform. Keeping every property indefinitely also has a cost. My concern would be whether each decision has a defensible capability case and a properly costed transition. Neither the need to modernise nor a site’s history answers that question on its own.
For industry, I would treat this report as an increase in uncertainty around the timing and scope of affected work. It is not a basis for marking the whole program as cancelled.
Consultants and contractors should check the dependencies behind opportunities associated with a disposal. Has a relocation destination been agreed? Is the receiving-site work funded? Does the proposed exit date allow that work to be completed? A change to the disposal sequence can affect design, construction and facilities management on both sides of the move.
Environmental investigations, heritage assessments, valuations and options studies remain necessary to make sound decisions. That creates a continuing need for specialist advice, although it does not guarantee that a particular commission or procurement will proceed. Finance currently directs businesses interested in supporting the program to its appointed Strategic Industry Partner. Its feedback and future-use registration process is expressly not a sale process and provides no preference in a subsequent disposal. Finance’s guidance is worth reading before treating a listed property as a near-term development opportunity.
A delay also leaves an estate management job to do. Buildings still require maintenance, occupied facilities still need to be safe, and vacant properties still need security and care. Any pause should come with a funded plan for the intervening period.
The committee’s final report is due by 25 February 2027. The immediate things to watch are the government’s response to the interim recommendations, any changes to individual site plans and whether Parliament takes up the proposed oversight powers.
My reading is that the report raises the standard of evidence the government will be expected to provide for each disposal. For Defence and the businesses supporting it, the useful response is to get specific: explain why the property is no longer needed, show how its functions will be accommodated, and demonstrate what the Commonwealth gains after the full cost of the move.
Author: Darian Macey
Darian is a former Engineering Officer with the RAE with tertiary qualifications in Engineering and Project Management. He is a leading practitioner within Australia's NSI sector with previous employment in Government, project management and building contractor organisations.
