An audit of Australia’s military landholdings and the government’s response to it, both issued on 4 February, mark the most significant reform of the assets in decades.
Long expected, the audit lands at a critical moment, as the Defence establishment confronts rising strategic risk, constrained workforce growth and mounting pressures on sustaining military capability. The findings of and response to the audit, Delivering the Future Estate, are therefore not simply about property management; they go directly to force posture, readiness and resilience.
The audit’s organising principle is clear: if a site does not deliver a demonstrable capability benefit, it should not remain on the Defence balance sheet.
Importantly, Defence and the Department of Finance have said all divestment proceeds and sustainability savings will be spent within Defence—across capability, on other properties, and equipment.
At its core, the audit presents an opportunity to sharpen Australia’s force posture by rationalising land holdings and redirecting spending towards modern, resilient and operationally relevant infrastructure. Proposed disposal of metropolitan rifle ranges, ageing training depots, surplus warehousing and old administrative sites could free resources for enabling infrastructure in northern Australia, deeper logistics capacity and sustainment systems aligned with Australia’s strategic geography.
But this transition must be carefully managed. Many of these sites quietly underpin Reserve force training, readiness and workforce retention, particularly in metropolitan areas where relocation is not feasible. Without deliberate replacement or alternative access arrangements, estate reform risks weakening the Reserve component that provides the Australian Defence Force with essential mobilisation depth, domestic response capacity and surge resilience. The strategic task is therefore not simply to reduce footprint but to ensure that estate reform enhances overall force readiness while preserving the Reserves as a credible and accessible pillar of Australia’s force posture.
The audit was commissioned in the wake of the 2023 Defence Strategic Review to answer a seemingly simple but deceptively complex question: does Australia’s defence estate actually support the force we need to mobilise and sustain? That question matters because the estate is not a background administrative function. Bases, training areas, ports, airfields, warehouses and fuel infrastructure are what translate strategy into operational reality. If they are misaligned, poorly located or prematurely divested, no amount of investment in platforms or weapons systems will compensate.
For too long, defence estate policy has sat awkwardly between strategy and budget repair, with emotion and nostalgia lurking in the background. Successive governments have treated property holdings as a source of potential savings rather than as an integrated component of force posture. The result has been chronic underinvestment, opaque divestment processes and a persistent gap between strategic intent and the infrastructure required to deliver it. The audit was meant to test whether the size, location and condition of the estate aligned with Australia’s evolving strategic circumstances—particularly a more contested Indo-Pacific, longer supply lines and increased reliance on northern and western operating bases. It also sought to challenge optimistic assumptions about divestment proceeds, which have often been overstated, delayed or absorbed by remediation and relocation costs.
The timing of the audit’s release is significant, coming ahead of the 2026 National Defence Strategy, as Defence juggles accelerating capability programs with workforce constraints and rising sustainment demands. In this environment, the estate can no longer be treated as a passive asset pool. Decisions about consolidation or disposal will directly shape readiness, resilience and retention. There is also a transparency imperative. In recent budgets, estate divestment proceeds have been bundled with unrelated asset sales, obscuring what Defence is realising from property transactions and whether those proceeds are genuinely funding capability uplift or masking structural funding gaps.
The audit’s findings cut through several long-running assumptions. It identifies about $3 billion in gross divestment proceeds, offset by around $1.2 billion in relocation, remediation, due diligence and transition costs, yielding an estimated net return of $1.8 billion. It also dispels expectations of a wholesale south-to-north redistribution of ADF personnel. While the strategic importance of northern Australia is reaffirmed, the audit does not point to large-scale geographic workforce rebalancing through estate reform alone.
A central driver of reform is sustainment inefficiency. Defence currently spends hundreds of millions of dollars annually maintaining sites affected by degradation, security risks and, occasionally, unauthorised occupation. Defence estimates potential long-term sustainment savings of up to $2 billion annually, with more conservative near-term savings of around $100 million per year and avoided capital expenditure of approximately $300 million.
Underutilisation is another theme. Modern Defence office accommodation in Sydney and Melbourne is operating at roughly 45 percent utilisation, while old sites continue to carry high maintenance burdens. This mismatch underpins recommendations to consolidate personnel into existing modern facilities rather than retaining underused heritage buildings as office space. Heritage itself emerges as a sensitive but unavoidable issue. Many sites are historically significant, yet public access is often limited and the cost of preservation is borne disproportionately by Defence. This issue is particularly evident in the treatment of the Victoria Barracks in Brisbane, Sydney and Melbourne.
In total, the audit makes 68 recommendations, recommends retaining 67 sites in full, notes three already sold, and identifies 61 new sites for disposal. Most are small, dispersed, underused or vacant—confirming longstanding concerns about estate sprawl rather than strategic concentration.
However, the audit also identifies major sites for disposal, including Victoria Barracks (Sydney), Victoria Barracks (Melbourne), HMAS Penguin (Sydney), RAAF Glenbrook (west of Sydney), Spectacle Island (Sydney) and Woodside Barracks (east of Adelaide). Partial divestment is recommended at several locations, including Randwick Barracks (Sydney) and selected training depots, raising legitimate questions about how operational capability and Reserve forces will be preserved.
Implications for the Army Reserve footprint are particularly significant. Sites such as Lancer, Hampstead, Warradale and Derwent barracks and RAAF Williams, Point Cook and Laverton are flagged for change. Maintaining numerous small, ageing and intermittently used facilities can divert resources away from training, equipment and readiness—the very elements that determine whether Reserve forces can be mobilised at speed. Partial divestment seeks to preserve core functions while shedding surplus land, but the risk lies in execution. If divestment outpaces replacement or consolidation, Reserve capability could be weakened through reduced accessibility and local engagement.
What matters now is implementation. Over the next two years, identified sites will transfer to Finance for disposal. That handover must be treated as a continuation of the existing audit and assurance process. Finance, as the federal government’s specialist asset manager, is well placed to maximise value, but only if Defence’s due diligence, environmental assessments, heritage reviews and stakeholder consultations are accepted and carried forward without duplication.
The defence estate is not surplus to strategy. It is strategy, poured into concrete, steel and geography. This audit was much needed. The test will be whether Australia’s defence footprint can be aligned with the strategic weight we now ask it to carry.