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Thursday, 17 October 2002
Page: 5399

Senator HOGG (2:38 PM) —My question is to Senator Hill, the Minister for Defence. Why has the government decided to sell and lease back defence headquarters at Russell Offices? Isn't it the case that Russell Offices house the chiefs of staff of Australia's armed forces as well as our top security intelligence agencies such as the Defence Signals Directorate and the Defence Intelligence Organisation? Given the significant security risk, has the minister placed any limitations on who may buy the property? Will special security checks be conducted to prevent Australia's national security from being compromised once the ownership of Russell Offices transfers to private hands? Is the minister aware of any examples of overseas governments that have sold and leased back their national defence headquarters?

Senator HILL (Minister for Defence) —In relation to the last part of the question and answering that first, in the United Kingdom, for example, the Ministry of Defence leases a number of buildings within the Ministry of Defence headquarters. Obviously, security must be ensured, but that does not necessarily mean that ownership must be maintained. The government has been intending to sell and lease back Russell Offices, and in fact it is scheduled to proceed this financial year, but it would be done in a way that would ensure that security is not in any way prejudiced.

Senator HOGG —Mr President, I ask a supplementary question. Why does the government continue to ignore the findings of the Auditor-General that sale and lease-back projects are costly and wasteful exercises in which any immediate financial benefits are quickly outweighed by the cost of the leases? Can the minister table the cost-benefit analysis on which the government has based its decision to sell and lease back Russell Offices, so that the public may assess for itself whether it will get value for money from the government's latest outsourcing exercises?

Senator HILL (Minister for Defence) —The senator is right that you would do a cost-benefit analysis, and if the government did not believe there was a cost benefit in this it would not be engaging in the process. I will see whether that assessment can be released publicly. I am not sure whether one would want to release it before the sale, as it seems to me that it would provide information that one might not want to have in the marketplace when one was wanting to maximise the return from the deal. But, as I said, from looking at our record as against the Labor Party's record, I think we can be reasonably confident that we would be taking the best economic decisions, and we certainly would do it consistent with all security requirements. (Time expired)