It’s getting on for two years now, and the government is still not saying how it will reconfigure the Defence establishment’s land holdings, known as the Defence estate.
It announced an audit of the Defence estate in August 2023 in response to the Defence Strategic Review of that year. The audit aimed to determine whether the estate reflected contemporary needs, particularly the prioritisation of investment across Australia’s northern network of bases, ports and barracks. Four months later, the findings were delivered to the government. Yet, almost two years on, the results remain locked away.
The 2024 National Defence Strategy (NDS) emphasised that the estate must be configured to support the Australian Defence Force’s ability to project and sustain forces, backed by significant investment through the NDS’s accompanying spending guidelines, the Integrated Investment Program. But with less than a year until the next iteration of the NDS, there is still no clarity on how the audit will shape investment plans.
As outlined in ASPI’s Defence Budget Brief 2025–26, transparency of the estate budget has declined. Divestment revenues that were once clearly disaggregated—such as land and building sales—are now combined with proceeds from weapons, vehicles, inventories and even intangible assets such as software. This makes it impossible to know how much of Defence’s budget is being offset by estate sales, how those proceeds are allocated, or whether divestments are delivering the promised efficiencies.
Despite this, Defence Minister Richard Marles in June flagged sweeping reforms, including ‘billions’ in property sales, declaring that ‘everything is on the table’ to ensure AUKUS and other military programs are delivered on time. The audit’s unpublished recommendations may point in that direction, but without transparency, the public remains in the dark about what reforms are planned and which properties are at risk.
In recent months, public debates about spending the hypothetical proceeds of defence sites have also been troubling. Suggestions that divestment revenues could accelerate basing upgrades at the Cocos (Keeling) Islands or across north-western Australia are misguided. Divestment proceeds will never be fast enough—or large enough—to bankroll projects of that scale. The City of Sydney’s decision to fund master planning for Victoria Barracks further illustrates the risks of moving ahead of Defence itself. The barracks have not been identified publicly for divestment, yet should the site eventually be declared surplus, the process could take up to a decade. For the city to commit significant funds now seems premature at best.
The divestment process itself adds another layer of concern. As we noted in The Strategist last year, divestments are slow, costly and uncertain. Due-diligence site investigations, heritage assessments, land valuations, public consultation, environmental remediation, negotiations and approvals—not to mention the additional capital cost of relocating personnel and functions to other sites—drag on for years.
Crucially, the hidden costs of the Defence divestment process, rarely offset against the publicly disclosed final sale price, must be considered. Once those expenses are factored in, the net financial return is often far smaller than the headline figure suggests. In many cases, divestments are unlikely to generate the large pools of cash that some policymakers seem to expect.
Take Leeuwin Barracks in East Freemantle as an example. First earmarked for disposal in 2015, the site was initially expected to fetch more than $100 million. Yet nearly a decade on, the sale has stalled. Once we consider the costs of the divestment process over a period of 8 to 10 years, the net return could fall closer to $70 million. In Defence terms, that amount doesn’t stretch far: it might resurface a northern runway or fund a modest fuel-storage upgrade. While useful, it falls well short of the billions needed to harden northern bases and sustain force projection. More critically, when the associated cost of relocating personnel and functions from Leeuwin to Karrakatta’s Irwin Barracks (estimated at $360 million) is added to the equation, the result is a significant deficit. At a time when Defence faces acute workforce challenges, retaining bases in key metropolitan areas may in fact be essential to sustainment efficiencies, workforce retention and mitigation of attrition risks.
As I have long argued, the Defence estate is fundamental to Australia’s national resilience and force posture, serving as both a shield and an enabler of security. Today, it maintains strategic necessity while equally presenting budgetary burden. Divestment is not a silver bullet: without reform, it risks delivering delays, modest returns and unintended strategic costs. The Defence estate audit was meant to chart a way forward. Until its findings are released, questions about transparency, accountability and direction will only grow louder.