Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Parliamentary Standing Committee on Public Works, chaired by Senator Dean Smith, I present two reports: the first is the committee's Report 3/2015: Fit-out of new leased premises for the Department of Finance, Australian Capital Territory and the second is the committee's Seventy-eighth Annual Report (2014), which outlines the committee's activities during the calendar year 2014.

Reports made parliamentary papers in accordance with standing order 39(e).

by leave—The referral for the fit-out of new leased premises in Canberra to be occupied by Finance was received in December 2014. The estimated cost for the fit-out is $32.1 million. Finance proposes to occupy One Canberra Avenue in Forrest. Currently, Finance's workforce is distributed across numerous buildings, under six tenancy agreements. Finance told the committee that relocating will allow the agency to consolidate most staff into a single tenancy, with only a small number of specialist staff to be located elsewhere.

On 13 February the committee visited the John Gorton Building, one of Finance's existing tenancies. This was followed by an inspection of the proposed new tenancy at One Canberra Avenue. The committee also held hearings on the same day. The committee was told that market conditions in Canberra meant that Finance had been offered highly favourable terms for One Canberra Avenue, including a lease incentive to cover the fit-out—no doubt that might reflect last year's budget, Deputy Speaker. The committee had some concerns. The committee questioned some aspects of Finance's cost-benefit analysis, seeking assurance that the proposed relocation and associated fit-out represented best value from a whole-of-government perspective.

In correspondence received after the first hearing, Finance revised its cost-benefit analysis, adding around $120 million to Commonwealth revenue that it advised had been inadvertently omitted. The committee pursued this matter in a second round of hearings and was subsequently reassured that the proposed lease and fit-out is the most cost-effective option. The committee is therefore satisfied that the project has merit in terms of need, scope and cost, and recommends that this project proceed.

Before moving on, I would comment further on the committee's oversight role. Inevitably, when the Public Works Committee examines the need for a fit-out, leasing arrangements will be raised and discussed. Although the committee's establishing act—going right back almost to the start of this parliament—does not extend to it the authority to make recommendations in relation to leasing, the committee expects agencies to establish that leasing decisions have been made with due regard to the whole-of-government costs and benefits. And I stress that to those listening.

Deputy Speaker, the second report I present today is Public Works Committee's Seventy-eighth Annual Report. In 2014, the committee, chaired by the honourable Karen Andrews, reported on 13 works with a combined cost of $2.3 billion. The committee had 35 meetings, including inspections and public hearings across the country. Projects scrutinised included a proposal to construct 50 tropically designed dwellings at RAAF Base Tindal at a cost of $89.4 million. As a result of concerns expressed by the committee, an amended project proposal was submitted for construction of the same number of dwellings at Tindal but at a cost saving of around $47 million—well done to the member for McPherson for chairing that committee for that recommendation.

During the year, the committee approved 38 medium works. These are projects with an estimated cost of between $2 million and $15 million. The combined costs of medium works approved in 2014 were $252 million. The committee sought referral for inquiry of one additional medium work when it became apparent that the agency concerned had undertaken a series of similar projects in the preceding two years without notifying the committee. The committee has recommended that the Department of Finance write to all agencies to remind them of their obligations to the committee.

In July 2014, I was part of a delegation with then chair Karen Andrews where we undertook a visit to Indonesia and Thailand. The delegation examined progress on the construction of new, purpose-built Australian embassy facilities in Jakarta and Bangkok, and both were progressing well, particularly the Jakarta project. In its report of the visit, the delegation observed that both projects were progressing very well, and are expected to be completed on time and within budget.

Deputy Speaker, earlier I referred to the committee's oversight role and to the committee's authority under its establishing legislation. The committees is keen to ensure that its powers, processes and practices continue to be relevant in the current construction environment. These are matters that the committee intends to consider further, and I look forward to working with the chair, Senator Smith.

In concluding, I commend both reports to the House.