Inside the $3 billion battle over defence real estate

On Tasmania's northern coastline, about 45 minutes' drive from Launceston, sits a 5,500-hectare parcel of bushland with a tough job.

Stony Head Training Area is one of the island state's two military live fire ranges — used by the army to train, exercise, and of course, blow things up.

Peter Williams, a veteran and secretary of the Launceston RSL, said it was a place he knew well.

"I spent 47 years in the defence force, both reserve and regular," he said.

"A lot of my reserve time was down here in Tasmania, and I'm absolutely familiar with what those ranges are used for and how they're used.

"Stony Head, for example, is one of the best [beaches for amphibious training] in Australia."

The army has in the past been keen to promote Stony Head's usefulness, featuring it in slickly produced promotional clips as the ideal location to learn military basics.

But it won't remain in the army's hands for long.

Both Stony Head and Tasmania's other live fire range, Buckland Military Training Area, are to be sold as part of a nationwide sale of Department of Defence assets aimed at raising about $1.8 billion.

The sales will leave Tasmania without a live fire training area, meaning the state's Australian Defence Force (ADF) personnel will need to travel to the mainland for any weapons training too complex to run on civilian shooting ranges.

More broadly, Tasmania is losing the bulk of its defence assets — 15 of the 67 sites being sold nationally are in the state, the most of any jurisdiction bar Victoria.

Mr Williams is blunt on the impact he expects it to have.

"If they do what they're saying they're going to do, it will be the end of the reserve and cadets in Tasmania,"

he said.

The hard course of change

Defence is Australia's largest landholder, with 70 major bases and 3.8 million hectares of land.

Earlier this year, Defence Minister Richard Marles called a press conference at Parliament House, alongside his assistant minister Peter Khalil, and Finance Minister Katy Gallagher, where they declared change was coming for Defence's sprawling property portfolio around the country.

Mr Marles said the threats facing Australia meant resources needed to be shifted from the south and east, to the north and west — to places like Darwin and Perth, where bases like HMAS Stirling and RAAF Tindal had huge investment in recent years.

That meant hard decisions on the other side of the country. An audit of Defence estate recommended the government sell 68 properties, and it agreed to sell 67 of them.

The reasoning was relatively simple; Defence is holding too many properties, and many are either underused, sitting idle or could easily be consolidated.

Selling the 67 sites would generate $3 billion in revenue, which after the cost of remediation would deliver about $1.8 billion to the government.

The bulk of the sites listed for divestment, 48 of 67, are across Victoria, New South Wales, Tasmania and the ACT.

The estate audit also estimates that if the sites aren't sold, up to $3 billion in investment would be required within a decade to address defects across the 68 locations it singled out.

Among the sites were some with extraordinary history, like the 166-year-old Victoria Barracks in Sydney.

That plan has generated enormous heat, uniting the Coalition, Greens, teal independents and One Nation in condemnation, and led figures like former prime minister John Howard to accuse the government of "indifference to our proud national and military history".

There are also reservations at the top of defence's chain of command about many of the plans, from the loss of Victoria Barracks, to headaches like flying Tasmanian reservists around the country to train.

But the government has done little to try and extinguish the swelling anger, and is pressing ahead with its plans in earnest.

Northern exposure

Many of the proposed sites are broadly uncontroversial. The two ACT sites are a golf course and a parcel of land leased to a concrete recycling company, though golfers have launched a pitch to save their course.

One of the New South Wales sites, a parcel of land within Randwick Barracks in Sydney's east, has sat cleared and vacant for close to 40 years.

Others might carry heritage value but little practical use, like a 123-year-old drill hall in Kyneton, Victoria that isn't safe to occupy due to structural problems.

Some in the Coalition, which has railed against the proposals, concede there are sites in south-eastern Australia that should be sold to free up resources to invest in the north.

Liberal senator Jessica Collins has led a parliamentary inquiry into the changes, which recommended an immediate halt to the sales, though Labor senators on the committee disagreed.

"There will always be surplus land, and if it is genuinely surplus and the defence force agrees with it, then yes, we can sell that land," she said.

"But in the security environment that we are in, it is simply not a feasible idea to sell defence bases in our metropolitan centres and consolidate into larger bases."

Coalition figures say there has to be a recognition of a fundamental reality — that Australia's population largely lives in the south-east, and the ADF's footprint has to reflect that.

Protecting heritage

It was almost certain that the sale of a 166-year-old, 13-hectare block dominated by a large, Regency-style sandstone building was going to create some controversy.

While many of the sites listed for sale have significant history attached to them, the debate over Defence's lost heritage has crystallised around Victoria Barracks Sydney.

About 350 Defence personnel and public servants are based there, along with another few hundred reservists and cadets.

It's also the headquarters of Forces Command, responsible for directing much of the army's day-to-day operations.

Senior figures in Forces Command will largely move to Randwick Barracks, about 6.5 kilometres away, but the bulk of the personnel at Victoria Barracks will move to Defence Plaza Sydney, a large office block in the city.

Mr Marles said it was not defence's job to run "the oldest wine cellar in Australia", held at Victoria Barracks.

But he has said that even if Victoria Barracks was sold, heritage rules meant the history of the site would not be lost.

"This is going to actually open these sites up so that they can be enjoyed by Australians, and the stories of the service they have provided will become much better known. And the buildings are protected by law," he said.

One path to doing that, aside from selling off the site, would be to hand sites like Victoria Barracks to an organisation like the National Trust, which maintains and conserves significant historical sites around the country.

Lessons of history

There is a historical parallel for such a move too.

When the Howard government sought to sell off defence sites early in its first term, like the former School of Artillery at North Head near Manly Beach, it faced enormous public pushback.

It was feared the hugely valuable parcel of waterfront land would be sold to developers, and instead, the then-federal government established the Harbour Trust to manage it and other similar sites.

That approach isn't without its critics, who say the North Head site has since fallen into disrepair and most of its historic buildings aren't publicly accessible.

If Victoria Barracks does land on the property market, even with significant heritage requirements in place, some in the property industry expect enormous interest.

Michael Pallier from Sotheby's International Realty in Sydney said the appetite for a mixed-use development with residential apartments and retail would be huge.

"They may build new residential apartments on the land, and keep the heritage precinct for restaurants, cafes, dining — they might even put a hotel there," he said.

"That's what I could see it being used for. It's a fantastic location, an iconic site."

But he said there were some defence sites listed for sale that were so complex, they might have trouble being sold at all.

Spectacle Island is a small island in Sydney Harbour dotted with buildings once used to store gunpowder and other munitions, and more recently used by navy cadets and to store artefacts.

Mr Pallier said given it was accessible only by boat and covered in heritage-listed buildings, it would be a challenging prospect for any potential buyer.

Fuelling opposition

Senior Defence leaders say the ADF has adapted before and can do so again.

Chief of the Defence Force Admiral Mark Hammond used Senate estimates to try and ease concerns about the impact of the changes on defence.

"At the turn of the century, the spiritual home of the submarine force, HMAS Platypus, was divested. In the past, [Sydney's Middle Head] facilities have been divested," he said.

"There is an element of change that we are used to.

"We decommission ships in the Royal Australian Navy quite regularly. Our people feel a connection to the infrastructure, the platforms and the equipment, and it's right to acknowledge that.

"I also highlight that we are, and we remain, a professional war-fighting force. Whilst this is a consideration, it does not define us."

The government says there is work underway to iron out some of the obvious problems, like Tasmania's live fire range issue.

Mr Marles said a solution would be found to make sure reservists and cadets in Tasmania weren't left worse off, but was yet to provide details on what that would look like.

"We will be making sure that, in terms of what is provided, that there are the same or better opportunities for both reserves and cadets," he said.

Selling 67 sites at once risked starting 67 individual spot fires for the government, as plans for each site generated their own opposition.

The Coalition's attacks on the proposals have centred heavily on heritage arguments, seeking to tap into community concerns that defence history is being lost or disregarded, and finding a receptive audience on talkback radio and NewsCorp papers.

But senator Jessica Collins said the strategic argument against the changes was just as valid.

"I don't think one trumps the other. I think they're both as important as the other," she said.

"Morale is a force element. It is part of our capability. And if you sell places like Victoria Barracks Sydney, morale is going to take a huge hit across the army but also the other defence forces as well.

"But the strategic risk is massive, and we have huge metropolitan populations that will no longer be as protected as they would have been had we kept all these bases."