Defence - Major capital facilities projects1


Budget Review 2010-11 Index

Budget 2010–11: Defence

Major capital facilities projects

David Watt

The 2010–11 Budget contains $1.7 billion in funding for Capital Facilities Projects—the building, upgrading and maintenance of Defence facilities. The Defence Portfolio Budget Statements 2010–11 (PBS) contain extensive data about works falling within this area. In particular, Table 28 of the PBS lists all of the major and medium capital works by state and federal electorate.[1]

Major Capital Facilities projects involving expenditure over $15 million require Government approval and are reviewed by the Parliamentary Standing Committee on Public Works. Medium facilities projects have an expenditure of between $250 000 and $15 million.

One of the major criteria by which funding is allocated is that facility upgrades should support the Approved Capital Major Investment Program (ACMIP). Examples of projects which appear to fit this criterion include:

  • RAAF Base Amberley facilities to support the Super Hornet aircraft
  • Multi-role helicopter facilities at HMAS Albatross, RAAF Base Townsville, Army Aviation Centre at Oakey and Gallipoli Barracks Enoggera
  • Airborne Early Warning and Control Aircraft facilities at RAAF Base Tindal
  • Hardened and Networked Army Facilities to support the creation of  a mechanised battle group at Edinburgh and
  • Heavy Airlift Capability Facilities to support the C-17 Globemaster 111 aircraft at Amberley (the home base of the aircraft) but also at Edinburgh, Townsville, Darwin and Pearce.

Other major areas of expenditure are associated with the Enhanced Land Force projects:

  • a range of accommodation and facilities upgrades (Enhanced Land Force Stage 1) at the following locations: RAAF Base Richmond, Holsworthy, Singleton, Kapooka, Puckapunyal, RAAF Base Amberley, Lavarack Barracks, Townsville High Range Training Area, RAAF Base Edinburgh and Campbell Barracks and
  • a range of accommodation and facilities upgrades (Enhanced Land Force Stage 2) at  the following locations: Singleton, Garden Island, HMAS Penguin, Watsonia, Puckapunyal, RAAF Base Amberley, Enoggera, Canungra, Lavarack Barracks, Townsville Field Training Area, Greenbank Training Area, Wide Bay Training Area, Cultana Training Area, RAAF Base Edinburgh, Majura Field Training Area, Royal Military College Duntroon.

Taken together, these projects account for over $900 million of the Capital facilities budget for 2010–11, and a not insignificant amount of the rest will be spent on other works at the same bases.

Both the 2009 Defence White Paper and the 2008 Audit of the Defence Budget (Pappas Review) made much of the need for Defence to consolidate its extensive estate holdings. The White Paper puts this succinctly:

Defence should consolidate units into fewer, larger and sustainable multi-user bases aimed at increasing the alignment of functions at Joint and Service level and their capacity to support operations...[2]

The White Paper also stated that Defence would rationalise its storage and distribution network, reducing the number of sites from 24 to seven.[3]

The Government has been reluctant to move rapidly towards the closure of bases. When the Minister for Defence released the public version of the Pappas Review in November 2009 he announced that he had instructed the Department to conduct a review of Defence’s basing requirements. This would be:

A comprehensive departmental review, including a strategic assessment of Defence's basing requirements and a detailed financial analysis of long-term costs and efficiency gains of different basing mixes, will develop options for changes to the estate over a 25-30 year period. “It is envisaged that a detailed study of this type will take 12-18 months to complete. An independent commission will then be appointed to consider Defence's recommendations. This commission will conduct substantial public consultation before reporting back to the Government,...”[4]

The Budget does not provide many clues about the Government’s thinking on base closures. It is highly unlikely that the larger (and growing) bases mentioned above will be closed and it is also notable that Queensland and the Northern Territory are to receive close to $680 million of the money allocated to major and medium capital facilities projects. Given that, according to the Pappas Review, Defence owns 350 properties and leases 350 more—albeit only 76 of these are bases with permanent staff—there is certainly plenty of scope for the Government to look at rationalisation.[5]

Moorebank

The Budget also provides $13.7 million in 2010–11 and $21.5 million during 2011–12 to facilitate Defence moving the School of Military Engineering from Steele Barracks at Moorebank to the barracks at Holsworthy.[6]  This is part of the Government’s strategy to build a major intermodal transport terminal at Moorebank.

The Howard Government announced in 2004 the plan to build a road and rail freight hub at Moorebank, and both the current Government and the Opposition promised the development of the transport terminal at the time of the 2007 election. Both the cost of the removal of the School from Moorebank and its final location (the initial announcement listed Puckapunyal as the new home) have been under discussion for much of the intervening time.[7]

Moorebank remains the location of Defence’s National Storage and Distribution Centre (NSDC) and the decision mentioned in the White Paper to rationalise the network of distribution centres has led to a decision to build a new ‘state of the art’ centre there.[8] It should be noted that Defence has not actually owned the land at Moorebank on which the NSDC is sited since 2003, having sold it to Westpac Funds Management (reportedly for $185 million) and then leased it back.[9]


[1].    Australian Government, Portfolio budget statements 2010–11: budget related paper no. 1.5A & 1.5C: Defence Portfolio, Commonwealth of Australia, Canberra, 2010, pp. 56–63, viewed 18 May 2010, http://www.defence.gov.au/budget/10-11/pbs/index.htm

[2].    Department of Defence, Defending Australia in the Asia Pacific century: Force 2030, Department of Defence, Canberra, 2009, p. 121, viewed 17 May 2010, http://www.defence.gov.au/whitepaper/docs/defence_white_paper_2009.pdf

[3].    Ibid., p. 124.

[4].    J Faulkner (Minister for Defence), Defence Budget Audit released, media release, 17 November 2009, viewed 17 May 2010, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressrel%2FMPBV6%22

[5].    G Pappas, 2008 Audit of the Defence Budget, Department of Defence, Canberra, 2009, viewed 18 May 2010,  http://www.defence.gov.au/publications/DefenceBudgetAudit.pdf

[6].    Portfolio budget statements 2010–11: Defence Portfolio, op. cit., p. 26.

[7].    J Saulwick, ‘Dogs of war caught up in scrap over freight terminal’, Sydney Morning Herald, 3 March 2010, p. 1, viewed 18 May 2010, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressclp%2F9N1W6%22

[8].    Department of Defence, The Strategic Reform Program: making it happen, Department of Defence, Canberra, 2010, p. 7, viewed 18 May 2010, http://www.defence.gov.au/srp/docs/srp.pdf

[9].    K House, ‘Westpac snares top Defence site’, Australian Financial Review, 4 February 2003, viewed 18 May 2010, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressclp%2F4VF86%22

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