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Monday, 26 November 2012
Page: 13117

Ms SAFFIN (Page) (12:42): On behalf of the Parliamentary Standing Committee on Public Works, I present the sixth report for 2012 of the committee, Referrals made May to September 2012, and I ask leave of the House to make a short statement in connection with the report.

In accordance with standing order 39(f) the report was made a parliamentary paper.

Ms SAFFIN: by leave—On behalf of the Parliamentary Standing Committee on Public Works, I present the sixth report of 2012, addressing referrals made May to September 2012. This report deals with four referrals with an estimated total cost of $932.6 million—a lot public funds. The first inquiry I will address examined the proposed Defence Logistics Transformation Program, or DLTP, for the Department of Defence. The purpose of the DLTP is to deliver new or refurbished purpose-built infrastructure that will enable the seven joint logistics command units to provide enhanced support to Australian Defence Force elements and operations. The overall project cost is $752.7 million. The current defence wholesale storage network operates from outdated infrastructure spread across 201 warehouses in 24 locations. The DLTP will consolidate the wholesale logistics network to seven primary sites, supported by nine specialty retail sites. This will provide consistency across all sites, with a safe, modern and sustainable work environment that meets current and anticipated future requirements.

The committee observed various World War II-type warehouses that were not built for the purposes they presently serve. These facilities impinge on Defence's ability to efficiently store and maintain items. The warehouses are also difficult to heat, cool and ventilate effectively, and require workarounds to meet workplace health and safety requirements. The committee is satisfied that consolidating and updating facilities will prove beneficial to the provision of logistic support for Defence, and recommends that the project proceed.

I now move to the two Defence Housing Australia inquiries. Defence Housing Australia, or DHA, is contracted to manage on-base housing for Defence at Larrakeyah Barracks in Darwin and RAAF Base Tindal at Katherine in the Northern Territory. The two inquiries dealt with upgrades to on-base housing at these bases. DHA plans to upgrade 48 dwellings in the Larrakeyah Barracks residential precinct in four stages, at a cost of $25 million. DHA also plans to upgrade 131 dwellings on RAAF Base Tindal in two stages at a cost of $57 million.

Housing at the two bases is outdated and no longer meets Defence's minimum standards. Some dwellings at Larrakeyah Barracks, built in the years immediately following Cyclone Tracey, are now uninhabitable. On-base housing at RAAF Base Tindal was largely constructed in the mid-1980s, with only minor upgrades occurring since then. The Defence minimum standards have been updated to reflect changes in community standards and demand. The committee understands that there may be substantial variation amongst houses scheduled for upgrade, and that DHA is taking all appropriate measures to deal with and mitigate the possible effects of the individual nature of those proposed upgrades.

The committee is confident that at both Larrakeyah Barracks and RAAF Base Tindal the proposed upgrades provide better value for money than demolition and construction of new houses. This was something the committee satisfied itself on beyond reasonable doubt. It is more expensive to do some of the work in the Northern Territory. Further, the committee is satisfied that the costs for the project are in line with what would be expected in the Northern Territory. The committee recommends that the two housing upgrade projects proceed.

The last inquiry I address today concerns the proposed new National Archives preservation facility, and refurbishment of the existing facility for the National Archives of Australia at Mitchell in the ACT. The committee defers making a decision on the Mitchell refurbishment aspect of the referral at this time, as negotiations with the landlord are not due to commence until 2015. This component of the referral is undeveloped, premature and may not proceed as proposed. The committee expects the Mitchell refurbishment project to be re-referred at an appropriate time.

The committee recognises the legislative responsibility to store archives from Australian government agencies, and finds that there is a vital need for additional storage space for the National Archives of Australia. The committee was disappointed to learn that the scope of the project is limited to a functional design brief. Typically, projects that are referred to the committee for approval are at a point where a preliminary or sketch design has been prepared and costed. Unfortunately, the committee has determined that this project does not provide value for money for the Commonwealth and cannot proceed in its current form.

The precommitment lease model proposed by the National Archives of Australia provides for the delivery of an integrated fit-out. However, without any capital funding available upfront the cost of the fit-out is amortised over a lengthy lease period. The amortising of the fit-out for the project would see the fit-out costs effectively jumping from $21.3 million to around $52 million, with an unknown quantum of additional lease costs. This substantial cost blow-out could be avoided if the capital for an integrated fit-out were available upfront.

The committee understands that the National Archives of Australia is a small agency with little capital backing; however, this project has been in development for a number of years, providing National Archives of Australia sufficient time to lobby for capital funding for such a significant national project. The cost of the project could be significantly reduced if a larger up-front contribution was made by the Australian government; therefore, the committee recommends that the Australian government provide the necessary up-front funding to National Archives of Australia for the integrated fit-out of the proposed National Archives preservation facility project, thereby providing a superior value-for-money outcome for the Commonwealth. I am confident that National Archives of Australia will re-refer this project to the committee in a more suitable form, and, hopefully, with a favourable funding arrangement provided by the Australian government.

I would like to thank members and senators for their work in relation to these inquiries. In saying that, I wish to thank all witnesses who presented to the committee in person and by way of submission. Again, I want to put on record the good work that the committee members do with this committee. It is a committee that has a lot of work before it, and everybody participates in it really well and actively. I also want to thank the deputy chair, the honourable member for Mallee, for the sterling work that he does and for the support that he provides to me as chair. I thank the committee secretariat, who serve the public wonderfully through the work of the parliament and through this committee. I commend the report to the House.