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The recently released Defence Estate Audit could become a thinly veiled attempt to permanently restructure who controls Defence property, according to assertions made in a newly published risk report.
The report, titled The Defence Estate Audit: A bureaucratic power grab dressed as an independent audit, alleges that the audit could act as a deliberate “bureaucratic power grab” restructuring who controls Defence property, the money generated from that property and regulation around Defence’s heritage and environmental obligations.
The independent white paper, published earlier this week and authored by NWE Strategic Risk Management principal Peter Robinson, examined whether the 2023 Defence Estate Audit was designed for consolidating power within Defence’s estate bureaucracy, particularly the Security and Estate Group.
Concentration of authority concerns
The risk report alleged that changes being undertaken as part of the Defence Estate Audit response could potentially weaken independent financial, environmental and heritage oversight while centralising property decision making within Security and Estate Group.
“The estate function has argued since 2007 that it is the underfunded ’poor cousin’ of capability acquisition. Every major review for 35 years made the same finding. None resolved it. This audit is that argument’s culmination, now attached to a self-funding mechanism: sell the estate, keep the proceeds inside Defence,” Robinson said.
“This appears in the key points, executive summary, and recommendations 1, 7 and 16. It is the report’s most repeated substantive conclusion.
“Every significant recommendation consolidates power in the estate function. The report simultaneously concentrates operational authority in the estate function.
“Rec 12: consolidates all property management positions across Defence into Security and Estate Group. Every other part of Defence loses the function … Rec 16: amends the Defence Act to give the Minister for Defence estate decision power, proceeds mandated to stay within Defence. Finance oversight is removed.
“Rec 15 / BPI 17: accredits Defence’s own heritage assessment processes, centralised within Security and Estate Group. Defence becomes its own heritage regulator.
“Para 5.19: ‘Final decisions should be made within Security and Estate Group’… The three services lose authority over their own facilities.
“(The government’s accepted recommendations) collectively remove Finance’s independent oversight role, consolidate all property management authority within Defence’s Security and Estate Group, and transfer heritage regulatory responsibility from DCCEEW to Defence itself,” the risk report said.
“These consequences do not appear to have been visible to the government at the time of acceptance and will haunt the current and future governments if implemented.”
Public interest groups
Crucially, the risk report calls for more information regarding whether the Defence Estate Audit is genuinely independent while not explicitly establishing independence, undisclosed financial relationships between the auditors and Defence, reduction of environmental and heritage oversight, the audit’s criticism of normal democratic processes involving interest groups and, most crucially, the shifting of property-management powers from the services and other Defence areas into Security and Estate Group.
“(The audit states) ‘There has also been a lack of political will to proceed with property disposals due to interest groups making representations on alternate use cases’… Democratic accountability reframed as management failure,” the risk report said.
“The auditors characterise compliance with that requirement (of alternative efficient use be assessed before disposal) as political failure, a position that serves only one interest: the estate function’s preference for unconditional commercial sale, and total independence from scrutiny.”
Recommendations and distractions
In addition, the report alleged that the Defence Estate Audit is treating the disposal of 68 sites as a distraction to potentially obscure broader structural recommendations.
In the government’s 20 accepted recommendations, consolidating all property management within SEG and changing the Defence Act to allow estate disposal proceeds to remain within Defence and reducing Finance oversight are of particular concern to the risk report.
“The disposal list of 68 sites generated sufficient political controversy to distract all scrutiny away from other power accumulation recommendations. The disposal recommendation is also the element most likely to be contested, delayed and partially reversed, but then ultimately implemented once power is centralised,” the risk report said.
“The structural recommendations require no legislation, no public consultation and no community objection. They are already being implemented by administrative direction with the estate transformation division, the EPBC accreditation process commenced, and the consolidated property management function is being built.
“The government has agreed, not in principle, but agreed to all 20 recommendations. The structural changes will be permanent regardless of how many individual disposals ultimately proceed. Whether the disposal controversy was designed to serve this purpose or was simply the most audacious element the authors could achieve, the practical effect is the same.
“The accumulation of power embedded in the audit report should be of grave concern to all in the political class regardless of party.
“A bureaucracy openly frustrated with the governance framework it is required to comply with has used an independent review to bypass that framework, and the government appears to have accepted the result without awareness of what it contains.
“The window to stop the program is narrowing: the structural power accumulation is underway and will shortly be irreversible. The disposal controversy has provided the cover. This committee is the mechanism to remove it.”
Final thoughts
The Defence Estate Audit is major change for Australia with a 68-site disposal program and, according to the risk report, a permanent restructuring of who controls Defence property, who controls the money generated from it, and who regulates Defence’s heritage and environmental obligations.
The process needs to be operated transparently and taken on board the thoughts of “public interest groups” instead of risking a speculated “bureaucratic power grab”.
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