- Proposed Fit-out of Existing Leased Premises at 200 Collins Street, Hobart, Tasmania
Australian Taxation Office
3.1The Australian Taxation Office (ATO) seeks approval from the Committee to proceed with the proposed fit-out of its existing leased premises at 200 Collins Street, Hobart, Tasmania.
3.2The purpose of the project is to refurbish the reduced leased area to ensure it is fit for purpose, supports staff and the ways of working in the ATO.
3.3The total estimated cost of the fit-out is $24.5 million (excluding GST).
3.4The project was referred on 7 February 2023.
Conduct of the inquiry
3.5Following referral, the inquiry was publicised on the Committee’s website and on twitter.
3.6The Committee received two submissions and two confidential submissions. A list of submissions can be found at Appendix A.
3.7On 5 April 2023, the Committee attended a project briefing and site inspection at 200 Collins Street, Hobart. This was followed by a public and in-camera hearing at the Parliament of Tasmania. A transcript of the public hearing is available on the Committee’s website.
Need for the works
3.8The ATO has entered into a new lease for 6,353m2 of office space at 200 Collins Street, in alignment with its location strategy, which recognises ‘the long-term business need to maintain a presence in Hobart’. The new lease is for a period of 10 years (until 2032), with two additional five year lease extension options available.
3.9The new lease will reduce office space by 21 per cent from 8,065m2 to 6,353m2 net lettable area (NLA). This reduction is a result of rightsizing to the ATO’s ongoing workforce requirements, and to align with Commonwealth density targets of a maximum of 14 metres per occupied workpoint. This rightsizing has been similarly pursued in other recent ATO fit-outs approved by the Committee.
3.10The ATO has been located at 200 Collins Street, Hobart since 1992. The following minor works have been completed at this location:
- 2004 to 2007:
- installation of workstations across all floors
- refresh to breakout areas
- upgraded kitchens
- landlord works including repainting of internal walls and recarpeting.
- 2018:
- installation of workplace services, service desk
- guard post upgrade to meet work, health and safety requirements
- minor audio-visual upgrades in meeting and conference rooms
- installation of a reheat kitchen and milling space to support corporate conference facilities.
- 2020:
- landlord works to upgrade lighting from T5 fluorescent lighting to LEDs.
- At the public hearing the ATO stated that:
The ATO's 2022-23 corporate plan prioritises enabling a high-performing workforce, including through continuing to embed new ways of working and making more effective use of our workplaces. To best support this purpose and key priorities, the ATO's property strategy seeks to deliver fit-for-purpose, safe and flexible accommodation that supports staff to thrive and succeed, and that reflects the changing ways of working.
3.12The ATO states that the existing fit-out is now at the end of its usable life and considers that the current layout does not support a contemporary, fit for purpose workspace which meets its business requirements. The staff workstations are old and lack serviceability, and the audio-visual no longer supports the ATO’s ways of working or business needs.
Options considered
3.13In its submission to the Committee, the ATO notes that it engaged with the Strategic Property Adviser (SPA), Department of Finance, and the ATO’s contracted leasing provider Colliers to consider the available options within Hobart. This process failed to identify any surplus Commonwealth office space that aligned with the ATO’s requirements.
3.14Following this process, the ATO undertook an open approach to market to ensure value for money, pursuing a single-stage procurement process of a Request for Proposal on 2 November 2020.
3.15At the conclusion of the approach to market process, in accordance with the Commonwealth Property Management Framework, a lease proposal was submitted to the Secretary of the Department of Finance. Lease endorsement was then received from the Minister on 5 September 2022, enabling the ATO to procure 6,353m2 of office space at 200 Collins Street.
Scope of the works
3.16The ATO’s proposed project will refurbish two levels (levels 1 and 2) of office accommodation at 200 Collins Street, Hobart.
3.17The ATO has engaged external consultants Cushman & Wakefield as the project manager and PeckVonHartel as the architectural design team for the project. The project team aims to work with the various ATO business areas to establish requirements to deliver a fit for purpose design that meets both Commonwealth and ATO requirements.
3.18The fit-out of 200 Collins Street will follow the ATO’s practice of utilising unallocated workspaces with the aim of providing ‘an efficient, contemporary, and scalable workspace that supports a positive staff experience’.
3.19Accessibility requirements will also be factored into the design of the fit-out, ‘including wheelchair access to the building, office areas, door widths and heights, lift arrangements, parking and staff amenities’.
3.20The scope of works for the proposed fit-out at 200 Collins Street will include:
- 589 work points
- 2 SES offices
- 2 large staff breakout areas
- 8 beverage points
- a reheat kitchen
- 2 conference rooms
- 38 various sized meeting rooms / collaboration spaces
- an interview room
- a private room
- a prayer room
- a first aid room
- a computer room.
- A floor plan of the proposed works is included in the ATO’s submission, however the ATO notes that the final design ‘may be adjusted subject to the detailed design process and formal staff consultation’.
- At the public hearing the ATO stated that:
The Hobart site currently achieves a five-star NABERS rating. The proposed fit-out design gives consideration to improved efficiency through technology, equipment and services. The fit-out design and construction will align with industry best practice, sourcing sustainable and environmentally responsible materials and responsible disposal of the existing fit-out and construction waste wherever possible.
Staff consultation
3.23The ATO advised that a Site Working Group was established in December 2021. Members of the working group were nominated by senior executives to ensure there is a ‘consistent flow of information between staff and the project team’ and will aim to identify any potential issues and propose solutions developed based on staff feedback. The group membership consists of representatives from the ATO’s business areas, including: site leaders, site executives, union representatives and other specialty groups.
3.24In addition to the Site Working Group, all staff and their representatives will have the opportunity to participate in a formal consultation period on the proposed design and on any change to their work environment.
3.25The ATO state that the staff consultation will involve the following:
- regular meetings with the Site Working Group to discuss the project’s status and other issues
- establishment of a project-specific intranet to give staff regular updates
- creation of a dedicated project email address
- information sessions with presentations by members of ATO Property and external consultants
- email communications addressing key project decisions and milestones
- use of prototype furniture for staff to test and provide feedback on
- formal consultation with employees and representatives to seek feedback on the fit-out in accordance with the ATO Enterprise Agreement 2017.
- The ATO told the Committee that several updates had already been made to the concept plans based on feedback from the working group. This included the need for additional meeting rooms and the inclusion of phone booths for staff to have private or noisy conversations.
- At the public hearing the ATO stated that:
As standard in all ATO accommodation changes, the final design is subject to formal staff consultation, where all staff are encouraged to provide input. This is anticipated to commence mid-2023.
3.28The ATO reassured the Committee that should changes to the proposed design be made following the formal staff consultation they would be managed from within the approved project budget.
Engagement with the Community and Public Sector Union
3.29In its submission and at the public hearing, the Community and Public Sector Union (CPSU) raised concerns regarding the engagement and input from ATO staff into the design of the proposed fit-out to date. The CPSU also noted there had been some negative feedback from ATO staff across other offices which had recently undergone fit-out works.
3.30In its submission CPSU stated that:
While staff welcome an upgrade and refresh of the Hobart office, CPSU members’ primary concern continues to be a lack of genuine consultation on the designs and direction of their working environment.
3.31CPSU members from the Hobart office consider that there had been limited consultation and for input into the design of the fit-out. Under the consultation plan, by the time staff and their representatives are consulted many decisions would already be finalised, limiting the ability of staff to genuinely influence the fit-out design. At the public hearing the CPSU stated:
We think that there have been some missed opportunities in this process to bring workers along for the ride. What we're worried and concerned about more generally is that some simple solutions and things that could have been nutted out with a more in-depth consultation from the feedback we've had from our members could have made this process better in the sense that workers felt like they had some buy-in.
3.32The CPSU also noted that members were frustrated by the ATO’s perceived reluctance to acknowledge problems and concerns raised by staff in recent office fit-outs at other sites.
3.33The CPSU listed several key issues which ATO staff had raised with regards to the proposed floorplans. These issues include problems with the design of the workstations and resultant noise pollution. Staff from the Hobart office had requested that the partitions used in the Sydney and Townsville fit-outs not be used in Hobart as staff located in those offices were dissatisfied with the final product. Concerns were also expressed about the potential for noise pollution in the Hobart office, and a request for additional soundproofing has been made.
3.34Staff accessibility was another key issue raised by staff through the CPSU with particular concern being given to the impact of unallocated seating. The CPSU reported that the use of ‘unallocated seating has been an ongoing concern for people with limited mobility and those with disabilities’. The CPSU stated that experiences of staff across other ATO offices indicated that the ATO still had to work to do to ensure staff were accommodated appropriately. The CPSU requested that ATO staff with limited mobility and those with disabilities should have anchored desks, near amenities and storage for ergonomic and assistive equipment.
3.35At the public hearing the CPSU elaborated further:
There is concern that, if they're stuck with a locker at one end of the building, they move teams and they go to the other end of the building, will their locker move with them? Will that workspace move with them? I do have an example of somebody in that situation. They can have good days; they can have bad days with their mobility. They have a very specific OH&S setup, and they have actually raised concerns—around accessible parking as well, as they need that to be able to come to work and, obviously, do their job.
Cost of the works
3.36The proposed fit-out of the existing premises has an estimated total cost of $24,496,570, excluding GST. A contingency is included in this cost, which will aim to mitigate anticipated market pressures. The project’s cost is based on the test fit design and advice from the Quantity Surveyor, Donald Cant Watts Corke (DCWC). Project funding will be sourced from the existing departmental budget, and it is expected that the fit-out will reduce future operational costs.
3.37The cost per square metre of the project is expected to be $2,656m2.
3.38DCWC was not able to provide direct comparative data in relation to the project’s cost per square metre as no comparable projects had recently been completed in Hobart. Instead, analysis was conducted on other ATO projects in relation to location, net lettable area (NLA) and cost per square metre. Based on this analysis, the ATO consider that this project is within market range for its location.
3.39Further details on project costings were provided in the ATO’s confidential submission and during an in-camera hearing.
Revenue
3.40There will be no direct revenue generated by this project.
Public value
3.41The ATO advised that the fit-out at 200 Collins Street will provide public value by ensuring the continued operation of the Hobart ATO in a more cost-effective manner. Specifically, the ATO considers that the project is cost effective and provides public value by:
- ensuring a more efficient use of space and consolidation of staff over a smaller footprint
- reducing consumption including leasing, maintenance, and operation costs, as well as carbon footprint and environmental impacts
- providing of a scalable office accommodation which will allow future changes to align with business requirements
- providing a long-term commitment to staff in Hobart
- creation of construction jobs
- continuing the use of local businesses, public transport and services.
Committee comment
3.42The Committee considers that the ATO’s proposed project should proceed as it is satisfied with the project’s purpose, need, and value for money. Further, the Committee recognises that this project will enable the ATO to continue its operations in Hobart in a more cost-efficient manner.
3.43The Committee acknowledges the concerns raised by the CPSU. To ensure that the needs of staff are met by the fit-out, the Committee encourages the ATO to consult with its staff and the union at all stages of the process and maintain an open dialogue throughout the project.
3.44Feedback and lessons learned from previous fit-outs in Sydney and Townsville should be considered and the Committee encourages the ATO to consider changes to the design of the Hobart office based on staff feedback from across all of its localities.
3.45The Committee encourages the ATO to seek feedback from staff at an earlier stage of the design process for future fit-outs to ensure solutions to staff concerns are given adequate time to be incorporated into the final fit-out design.
3.46The Committee did not identify any issues of concern with the proposal and is satisfied that the project has merit in terms of need, scope and cost.
3.47Having regard to its role and responsibilities contained in the Public Works Committee Act 1969, the Committee is of the view that this project signifies value for money for the Commonwealth and constitutes a project which is fit-for-purpose, having regard to the established need.
3.48For future projects that fall within the oversight of the Public Works Committee, the Committee recommends that the Australian Taxation Office conduct broader staff consultation during the design phase.
3.49Future submissions to the Committee should include methods of staff consultation, a summary of staff feedback, and iterations to the design and scope of works resulting from staff feedback. This will ensure that submissions for future projects better reflect the final project design and the scope of works being considered by the Committee. In addition, early staff engagement will provide greater assurance that staff have had the ability to influence the proposed design.
3.50The Committee recommends that the House of Representatives resolve, pursuant to Section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed works: Australian Taxation Office - Australian Taxation Office Fit-out—Proposed Fit-out of Existing Leased Premises at 200 Collins Street, Hobart, Tasmania.
3.51Proponent entities must notify the Committee of any changes to the project scope, time, cost, function or design. The Committee also requires that a post‑implementation report be provided within three months of project completion. A report template can be found on the Committee’s website.