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Page 22 Senate Wednesday, 1 March 2017 Senator KITCHING: Thank you. CHAIR: Senator Hinch. Senator HINCH: I have a question for the minister on disposal of Defence department property. The old repatriations building at 310 St Kilda Road is up for sale. Are you aware of that and where is it at the moment? Senator Payne: I am. Could I ask the deputy secretary of the state and infrastructure group to come to the table? Senator HINCH: According to the website it says that the site is located within the Victoria Barracks foot print. It is across the road from the shrine. It was built in 1937 as a repatriations commission outpatient clinic for World War I veterans. When are you expecting the salver to go through? Mr Grzeskowiak: That is right. We have been looking at options for the disposal of this site for some while. It is built right on the edge of Victoria Barracks. The main entrance is actually off of the main road, rather than from inside the barracks. It has been disused for quite a long time. Senator HINCH: Twenty years, yes. Mr Grzeskowiak: Inside its condition is fairly derelict. We do not have a timeline for sale at the moment. A range of people have expressed interest. We are currently in discussions with some of those people, including the Victorian government. They now have an interest. So we are just allowing those discussions to move forward before we decide on the final– Senator HINCH: You say that there is no timeline, but on the sales brochure it says ‘Defence has completed its due diligence on the site. Defence anticipates divesting the site in 2017.’ Mr Grzeskowiak: Yes, we would hope to be able to conclude a deal later this year. Another angle of interest has popped up that we are just running to ground at the moment. We will work through that and then go to market, if that is appropriate, following the conclusion of those. Senator HINCH: Are you aware, minister, that the Australian National Veterans Arts Museum has been in negotiations and talks with the Lord Mayor of Melbourne, Mr Doyle, with Premier Andrews and with Brendan Nelson from the War Memorial for the past three years? Senator Payne: I am aware of ANVAMs interest and engagement, yes. Senator HINCH: What prompted this sudden decision now to try and sell it, and sell it to private people? You have a real estate agent getting involved. And you are selling it privately, when there are these negotiations with a genuine group of veterans. It will help veterans who are suiciding at a terrible rate. It will help them. Surely, wouldn't you keep that negotiation going first? Mr Grzeskowiak: That is what we are currently doing. There has been another avenue to that negotiation. We are giving that time to play through to see if that can form a deal. You rightly say we have been talking to this veterans groups for some three years. They have not been able to put together a proposal that would see them being able to take over that site successfully at this time. If that were to occur, then that would obviously be a consideration. Senator HINCH: Have you looked at an off market sale? Mr Grzeskowiak: The nature of the discussions we will be having at the moment could lead to an off market sale, but there has to be a credible purchaser. Off market sales generally go to state and territory governments. So there would have to be a credible purchase agreement. Senator HINCH: For an off market sale to happen, that would have to be approved and go through the Minister for Finance, Senator Coleman, correct? Mr Grzeskowiak: That is the normal process for off market sales. Senator HINCH: Has he been approached about an off market sale? Mr Grzeskowiak: Not yet, because we have not had a proposal that would be a credible off market sale. Senator HINCH: For three years they have been talking about peppercorn rents and 99 year lease and all this sort of stuff. We talk about veterans and how important artwork is. There is a famous quote from Weary Dunlop about how important art is for veterans. And you haven't even talked to the Minister for Finance yet? Mr Grzeskowiak: There is not a proposal on the table that we could credibly take to government for proposing an off market sale at this time. Senator HINCH: Are you aware that there is a heritage listing on this property? Mr Grzeskowiak: There is. FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE
Wednesday, 1 March 2017 Senate Page 23 Senator HINCH: Minister, knowing your interest in veterans’ affairs, knowing the crisis with suicides with vets and the importance of art with veterans, would you prefer an off-market sale, if it could be negotiated? Senator Payne: I am not sure you want me managing each divestment of the estate of the Department of Defence by my personal preference. I am not sure that would be a particularly rigorous approach. I am taking advice from estate and infrastructure group from the department. I know that Mr Grzeskowiak and his staff have been working closely with the proponents and with the Victorian state government to look at what the options are. As he has said, there is not yet a proposition put to government which is within the Commonwealth guidelines— how we deal with estate and spend the Commonwealth's money—that we are able to yet advance to the Minister of Finance. Knowing your interest, I would be very happy to talk about this further. Senator HINCH: One final question. It has been empty for 20 years. They are now saying you want to get it sold in 2017. Is there anything political in this? Before the election last year the federal Labor Party, the opposition, made it one of their policies to try and sell it and get it done for the veterans art group. I think they even offered $10 million towards it. Is there any connection here? Senator Payne: Not that I am aware of. In fact, I would say that in relation to all disposal matters they are done in the appropriate way according to the way the estate market operates and the way the finance guidelines require us to operate and not with any political considerations. CHAIR: Thank you. That is a good spot for us to suspend for 15 minutes for morning tea. Proceedings suspended from 10:31 to 10:45 Senator MOORE: Mr Richardson, I think this is a question for you. I am following up with various departments about the role that they are playing in the government's response of the sustainable development goals. I want to know whether your department is involved in the very large inter-departmental committee that has been set up by PM&C and DFAT, which is pulling together the whole cross-government response. I want to know whether Defence is part of that. Mr Richardson: I am sorry. I do not know the answer to that. Is that domestically oriented? Senator MOORE: It is both. That is why I would have thought your department would have had a role. Mr Richardson: If it is domestically orientated, it could be that the estate and infrastructure area is involved. Senator MOORE: I am happy to put it on notice, Mr Richardson. My understanding is that they have two committees at the deputy secretary level. Particularly with the wide ranging role of Defence, that would be great. Minister, I am not sure whether this is for you. I am particularly interested in the arrangements with Sudan. I think it would be easier rather than taking up the time of the committee to ask whether I get a briefing on— Senator Payne: On our engagement in South Sudan? Senator MOORE: I am looking at DFAT as well. Senator Payne: Of course. I will arrange that. Senator MOORE: Thank you. Senator KIM CARR: If I could return to the issue of contractors and consultants. Secretary, can you provide me with some advice as to the number of engineers currently working under Future Submarines Technical Office in Adelaide? Mr Richardson: We have the general manager of submarines here. He can come to the table. He will be here in a minute. Senator KIM CARR: I will go to another question. Senator Payne: If we do not have the exact numbers with us, then we will obviously take them on notice for you. Senator KIM CARR: I accept that some of these questions do require further advice. I am not concerned about that. Senator Payne: Thank you. Senator KIM CARR: On the Serco contracts, Austender documents indicate to me that there have been 121 separate contracts with Serco with the Department of Defence. Is that correct? Mr Richardson: I think Deputy Secretary Estate and Infrastructure is the person for that. Mr Grzeskowiak: From the estate and infrastructure perspective, we certainly used to have contracts with Serco Sodexo Defence Services. But when we retendered the majority of our base service contracts that were replaced two years ago, Serco Sodexo Defence Services were not successful in that process. FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE
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