Alex Gallacher (SA, Australian Labor Party) Share this | Hansard source

I rise to take note of the fifth report of the Parliamentary Standing Committee on Public Works and to make abundantly clear on the record that Labor dissented—a very unusual dissent—the Immigration and Border Protection fit-out—some $250-odd million worth of fitting out of four buildings, reducing their footprint from 12 down to four. It is a very, very unusual event that the Public Works Committee actually has a vote and divides on a proposal. The deputy chair, Mr Zappia, made some cogent remarks in the tabling of the report in the House of Representatives to the extent that the committee on the Labor side was not convinced about the merits of the argument put by Border Protection. They were not convinced about the reasons for moving. They were not convinced about the costs per square metre of the fit-outs. Also, they were not convinced by the justification which attempted to extrapolate net present value out some 30 years. The proposal from Border Protection was that in 30 years time will save in excess of $200 million. In this chamber, we do not have the luxury of knowing what is going to happen in 30 years time. I suggest that Border Protection, even with the assistance of the finance minister's department, would be unlikely to be correct in extrapolating a view over 30 years time.

What is precisely quantifiable is the mathematics of that work, but the assertions they make are unlikely to be gained in factual outcomes. We do not know what size the department will be in 30 years time. We do not know what its direction will be. We do not know the impact of technology on that department. We do not know the impact on any number of areas. But there is a mathematical assertion that on net present value there will be some savings in 30 years time—that is seven years after the end of the lease. At the end of the lease period of 23 years, they have extrapolated out for another seven years to justify their decision, which is to spend about $1.7 billion leasing premises and fitting them out with landlord incentives.

Labor Party had a couple of concerns. One is that it appeared to be excessive in terms of cost per square metreage. They did not achieve the parameters of $1,200 and $1,800 per square metre in any of the ventures that they are proposing. The cost was excessive. The second point is that it was financed by leasing incentives. The simple equation there is, if you are getting an incentive, you really do need to examine whether that has been recovered in higher lease prices. A simple analogy is: a building that was vacant for eight years is now going to be leased out for the next 15-plus years at the five-star rating value. The government is going to pay the top leasing payments for all of the time that it is leased out, despite the fact that it was built and not occupied for eight years. There is no discount in the lease incentives. The discount is advanced as a proportion of the fit-out cost, which ends up with the landlord. If you fit-out a building and you move out of it, you cannot take the fit-out with you: it ends up as value to the landlord. We had some serious concerns. I just wanted to make sure that we had on the public record the Public Works Committee divided and had a vote. The government members had the majority and put the expenditure motion through the parliament against the Labor Party members of the committee.

I just want to say this before I pass to Senator Ludlam: the last time we had a division of this type was in respect to a fit-out of some premises in Doha. Our diplomatic footprint is to be expanded. We are going to go into Doha and spend seven million bucks fitting out a floor of a five-star building at precisely the same time as all of the other countries in the region take their diplomatic posts out of Qatar. As Saudi Arabia, the United Arab Emirates and a number of other countries around there declare Doha a hotbed of terrorism, we are going in there to spend seven million bucks fitting out the expansion of our diplomatic footprint—quite ironic. Sometimes the Public Works Committee's deliberations are quite prescient. I will just say this: what Border Protection are doing is not value for money and it is not demonstrably in the public interest. It may well be an empire-building objective of the minister and Secretary Pezzullo, but it is certainly not in the public interest. They did not demonstrate value for money and, most importantly, they did not demonstrate to the committee the abundance of clarity or disclosure which we need to make proper informed decisions. Suffice it to say that Labor dissented, and I do not want to be as correct on this dissent as we probably are on the Doha dissent.

I seek leave to continue my remarks later.

Leave granted. Debate adjourned.