Sydney, Australia – The Australian government is embarking on a significant divestment of defence properties, including the historically significant announcement that Spectacle Island in Sydney Harbour will be put up for sale. The move is part of a broader $1.8 billion initiative to sell off 67 defence sites across the country, a plan that officials say will free up resources and address costly maintenance burdens.
Spectacle Island, located near Drummoyne on the Parramatta River, holds a unique place in Sydney’s history. Established in as a gunpowder storage facility, the island served a crucial role in the region’s defence for over a century. More recently, it housed the navy’s historical collection until , when the collection was relocated to Banksmeadow in Sydney’s east. Since then, the island has remained vacant, incurring substantial costs for the government.
The decision to sell Spectacle Island and other defence properties comes after a multi-year audit of the Defence estate, revealing a large portfolio of underutilised and expensive-to-maintain assets. According to Defence Minister Richard Marles, the audit identified properties that no longer serve a strategic purpose. The government estimates the sales will generate $1.8 billion, with an additional $100 million saved annually in maintenance costs. The proceeds will be reinvested into modernising defence capabilities.
The scale of the divestment extends far beyond Sydney Harbour. The plan encompasses more than 60 properties nationwide, including Victoria Barracks in Sydney, Melbourne, and Brisbane. Other assets earmarked for sale include golf courses, airbases, warehouses, training facilities, and vacant land, such as RAAF Base Glenbrook in the Blue Mountains. A major munitions site at Maribyrnong, in Melbourne’s west, is also slated for sale, with the potential to accommodate up to 6,000 new homes.
The government’s decision to sell off these historic sites has not been without scrutiny. The opposition has accused the government of selling off the “heart and soul” of Australia’s defence force. However, officials maintain that the divestment is a necessary step to ensure the defence portfolio is “fit for purpose” and meets current operational requirements. Marles acknowledged that some serving defence members may have emotional attachments to the properties, but stressed that the heritage value of these sites ultimately belongs to the Australian people.
The financial burden of maintaining these properties has been a key driver of the decision. Spectacle Island, for example, has reportedly cost taxpayers approximately $4 million in security expenses over the past four years, despite being unoccupied since . Defence Plaza, a state-of-the-art office building in central Sydney, is also reportedly only 40 percent utilised.
The sale of Victoria Barracks, a prominent landmark in several major cities, is particularly noteworthy. The audit revealed that many defence sites are costly to maintain and offer limited strategic value in their current state. The government hopes that by selling these properties, it can free up resources to invest in more modern and effective defence infrastructure.
The Department of Finance will manage the sales process, with some properties potentially being redeveloped for new housing. Public servants will be relocated to more modern office spaces, and certain heritage sites, such as the cabinet rooms used by Prime Minister John Curtin during World War II in Melbourne, may be opened to the public. This approach aims to balance the need for fiscal responsibility with the preservation of Australia’s historical heritage.
The broader context of this divestment is the Albanese government’s push to address housing affordability and availability in major cities. By releasing surplus defence land, the government hopes to stimulate the construction of new homes and ease pressure on the housing market. However, the sale of these properties also raises questions about the long-term implications for Australia’s defence capabilities and the preservation of its historical sites.
The government anticipates that the entire process will take several years to complete, as some assets may require extensive remediation or redevelopment. The sale of Spectacle Island is expected to attract significant interest from private buyers, potentially leading to the transformation of the island into a luxury residential or commercial property. The outcome will likely set a precedent for the sale of other defence sites across the country.
The $3 billion in proceeds from the sales will be crucial in funding the government’s broader defence modernisation program. As geopolitical tensions continue to rise in the Indo-Pacific region, Australia is investing heavily in new military capabilities, including submarines, long-range strike missiles, and advanced cyber warfare technologies. The funds generated from the sale of these properties will help to offset the costs of these investments and ensure that Australia remains a strong and capable defence force.
