- Proposed Fit-out of Existing Leased Premises at Caroline Chisholm Centre, 57 Athllon Drive, Greenway, Australian Capital Territory
Services Australia
3.1Services Australia seeks approval from the Committee to proceed with the Proposed Fit-out of Existing Leased Premises at Caroline Chisholm Centre, 57 Athllon Drive, Greenway, Australian Capital Territory project.
3.2The purpose of this project is to undertake fit-out works at the Caroline Chisholm Centre, located at 57 Athllon Drive Greenway, Canberra, to combine four of Services Australia’s Canberra office sites into two sites by 2027.
3.3The estimated cost of delivery of the project is $144.49 million (excluding GST).
3.4The project was referred to the Committee on 6 November 2024.
Conduct of the inquiry
3.5Following referral, the inquiry was published on the Committee’s website and via media release.
3.6The Committee received one submission, two confidential supplementary submissions and one confidential submission. A list of submissions is available at Appendix A.
3.7On 18 February 2025 the Committee received a private briefing and conducted a public and in-camera hearing at Parliament House. A transcript of the public hearing is available on the Committee’s website.
Need for the works
3.8The Services Australia national offices are primarily located in Tuggeranong, Canberra. National offices provide support to sites around Australia, including the agency’s face-to-face sites, smart centres, support and processing sites and occasional pop-up facilities.
3.9Two office leases (both on Reed Street, Tuggeranong), are due to expire in 2027. Consolidation was suggested because:
- The current fit-outs are old and at the end of their useful life.
- The fit-outs do not meet the government’s desired occupancy density targets.
- Having staff spread across multiple sites causes inefficiencies, higher costs, and security risks.
- At the public hearing, Services Australia provided information about how the Government’s desired occupancy density targets will be met by the proposed works:
Our current arrangement across the four sites is based on a one-to-one ratio of staff to workstations. We'll be moving to a ratio of 10 staff to eight workstations. That eight-to-10 ratio is something that we've set as a default across the agency and put in place across a range of our accommodation, particularly in a number of our large precinct areas. It has worked very successfully. The design is planned around that. It does also give us flexibility to change that ratio up or down, depending on broader needs or indeed specific needs of particular teams. We are accounting for the need to potentially surge or for changes to work practices in the future. The design is such that minimal construction is required to change the fitout to enable additional workstations if required, and we are putting in a number of flexible work areas that can be used for a range of areas.
3.11The state of each of the existing office leases is below:
- 57 Athllon Drive (Caroline Chisholm Centre): Built in 2007, this 5-storey building has a large central atrium and basement. The fit-out from 2007 is now old and needs replacing.
- 25 Cowlishaw Street (Louisa Lawson Building): Built in 2013, this 4-storey building has a central atrium and is fully occupied by the agency. The fit-out from 2013 is modern and in good condition, with 1,649 work points. This site will remain in use.
- 134 Reed Street: Built before 1990 and occupied by the agency in 2013, this site has an old fit-out that does not support a modern work environment. The ICT infrastructure also needs replacing.
- 186 Reed Street: Built before 2000 and occupied by the agency in 2009, this site also has an old fit-out.
Options considered
3.12Services Australia considered four options for the proposed works. These are outlined below:
- Extend the Current Lease at Caroline Chisholm Centre (CCC)
- The current lease allows for one or two 5-year extensions.
- This option has limited opportunities to improve the current fit-out, which includes space allocation and rent above market rates.
- It would also make it hard to transition to flexible work arrangements, likely requiring the renewal of leases at 134 and 186 Reed Street.
- Lease a New Site to Replace CCC
- Services Australia considered finding a new location to replace CCC.
- This was not feasible due to the tight market for A-Grade office space in Tuggeranong and the extra costs for fit-out, moving staff, and higher rent while keeping existing leases.
- Use Existing Commonwealth Leases or Owned Properties
- Services Australia consulted with Finance about other suitable Commonwealth properties.
- No suitable space was found that met the agency's needs and maintained a presence in Tuggeranong.
- Negotiate a New Lease at CCC (Preferred)
- This option allows for renegotiation to include fit-out improvements as well as ending the leases at 134 and 186 Reed Street when they expire.
- This option also enables refurbishment of CCC to meet the Federal Government’s target of 14 square metres per person or less.
- The new fit-out would create a modern, people-centric work environment to help attract and retain talent.
Scope of the works
3.13The CCC is a 5-storey building with a net lettable area (NLA) of 40,239m², including a basement and a large central atrium. It was purpose built for Services Australia and has been in use since July 2008. The current fit-out met previous government requirements but now needs updating to meet modern standards. The planned works would cover 38,606m² of the NLA.
3.14The proposed CCC fit-out works will encompass:
- Refreshing the existing fit-out to support flexible working with a desk-to-staff ratio based on business needs.
- Office spaces with partitions for individual offices, meeting and conference rooms, utility and storerooms, secure rooms, training rooms, break-out spaces, staff amenities, and communication equipment rooms.
- New furniture and workstations with power and data connections, plus wireless technology for mobility and portable devices.
- Workstations for 8 desks per 10 staff members, with flexibility to adjust based on business needs.
- Compliance with the Disability Discrimination Act for access to office floors, workstations, and meeting rooms.
- Personal lockers for each staff member to allow flexibility for responding to national events or emergencies.
- Ergonomic spaces like collaboration areas, meeting rooms, and training rooms to accommodate additional staff if needed.
- Storage for operational assets like computers, files, paper, hand sanitiser, and other items.
- Specialist spaces relocated from 134 Reed and 186 Reed Street to support Services Australia's operations.
- Offices and meeting rooms located away from the perimeter for an open office layout and access to natural light.
- Wireless data connectivity (Wi-Fi) to support mobility and wireless devices.
- Audio-visual equipment to meet AV needs.
- Extending the existing access control system and installing new speed stiles to replace old equipment.
- The landlord will also upgrade end of trip facilities, amenities, provide a new bike store, and install electric vehicle charging stations.
- At the public hearing, Services Australia discussed how learnings from previous fit-outs were being incorporated into the current works:
…it's about making sure we can optimise our occupancy and density, understanding what sorts of flexible work environments we can utilise and how we best co-locate people, and making sure we've got the right mix of people in the one area so that we can maximise operational efficiencies. There have been a range of learnings, even down to things like, when we're in very large areas, how we utilise lifts and things like that. So, yes, we're continuing to learn our fit-out design in terms of what works for us—the mix of meeting rooms and workstations—and we're continuing to evolve as we move forward.
Community and stakeholder consultation
3.17Senior executives and key staff from specialist business areas were consulted on the fit-out design. Services Australia noted that this consultation resulted in a detailed set of workforce requirements that guided the preferred accommodation solution.
3.18Formal staff consultation on the proposed fit-out design has started with specific divisions and will continue as the design develops. Services Australia will also engage with the community, the Public Sector Union, and relevant government members.
3.19At the public hearing, Services Australia provided more information about their consultation with staff to date:
As per our enterprise agreement, we will enter into a formal consultation with the CPSU and all our staff as the project progresses, as our design is complete and as we get closer to the moves…We've engaged with a range of areas—particularly those specialist areas that are in Reed Street—to ensure that all business requirements are accounted for within our design. To date, we've had positive feedback and no concerns raised that I'm aware of… it's a very small change. It's just literally up the road, so things like commutes, access to child care, or where people might go for lunch will all stay pretty much as they are.
Cost of the works
3.20The estimated project budget of the proposed works is $144.49 million (excluding GST) which includes contingency, project management, design and documentation and escalation to the year 2027.
3.21At the public hearing, the Committee heard that the proposed works are part of a forward plan to consolidate and optimise Services Australia’s property footprint, which will result in financial benefits.
… we have a very large property footprint of some 400 buildings around the country. We're identifying opportunities, as leases expire, to look where we can consolidate across various hubs to optimise our property footprint, both for financial benefit, to get better value for money for the Commonwealth, but additionally to make sure that we've got fit-for-purpose contemporary work spaces that bring all of our teams in areas together to be able to collaborate and work as one. That provides us with both a lot of financial benefits but also operational efficiencies.
Revenue
3.22There will be no revenue generated by the project.
Public value
3.23The works are expected to have positive, short-term effects on the local economy including job creation during fit-out for consultants, construction workers, suppliers and related services, use of locally sourced materials during construction, and boost to local services like cafes from construction workers.
3.24The works are expected to provide the following longer-term outcomes:
- Operational Efficiencies: Bringing together the four Tuggeranong-based agency staff into two buildings will improve operational efficiencies.
- Cost Savings: Improved leasing costs across the Tuggeranong property portfolio will provide better value for money.
- Sustainable Development: Modern and efficient building fit-out design and engineering systems will enhance Ecologically Sustainable Development outcomes.
- Higher Density Operations: Increased efficiency with a higher density of operations and a reduced overall footprint in Tuggeranong.
Committee comment
3.25The Committee did not identify any issues or concerns with the proposal, and it is satisfied that the project has merit in terms of need, scope and cost.
3.26The Committee was satisfied that the design of the proposed works meets government occupation density targets for office accommodation, while also allowing sufficient scope for surge capacity as and when required.
3.27The Committee appreciates the cost savings that will be realised through the negotiation of the new lease at the Caroline Chisholm Centre as well as the co-location of Services Australia’s four Tuggeranong office sites.
3.28The Committee acknowledges that learnings from previous Services Australia fit-outs are being incorporated into the design and scope of the proposed works and urges Services Australia to continue this throughout all future stages of the works.
3.29Having 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.
3.30The 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: Services Australia — Proposed Fit-out of Existing Leased Premises at Caroline Chisholm Centre, 57 Athllon Drive, Greenway, Australian Capital Territory.
Proponent 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.