The Australian government will respond to a 2023 audit of the defence estate by moving to divest and raise funds for new military equipment and base upgrades.

Approximately 35,000 hectares of defence real estate, including historic barracks, islands, golf courses, ranges, offices and training depots, are slated for sale to generate about $2 billion.

The sale is framed as a necessary step after finding waste and underutilisation across the estate, with the audit recommending tough divestment decisions.

Public debate is expected to focus on repurposing sites for housing, green spaces and cultural facilities to address inner-city housing shortages while preserving heritage.

Authorities, including Assistant Defence Minister Peter Khalil, stress protecting heritage buildings while broadening public access to military history.

There will likely be resistance from the public and veterans due to the cultural and historical value of many sites.

Heritage considerations are central, with sites such as Victoria Barracks and historic rooms used in WWII, while Spectacle Island’s wartime history and HMAS Penguin’s partial retention for a defence diving facility and medical school influence redevelopment constraints.

Potential benefits include saving taxpayers hundreds of millions over the next decade and expanding public access to military history, though heritage constraints may limit redevelopment.

Audit authors Jan Mason and Jim Miller say sustainment budgets are stretched and the estate cannot be maintained in full, acknowledging emotional reactions to the estate’s history and scale.

Cost figures highlight heavy maintenance: keeping Victoria Barracks Sydney could near $195 million over a decade; Defence Plaza Melbourne has cost about $130 million in five years, with Victoria Barracks Melbourne at low utilisation and Brisbane site underutilised.

Audited analysis shows many sites are underutilised and not publicly accessible, signaling significant consolidation potential.

All proceeds will be reinvested into defence, funding equipment purchases, upgrades and sustaining the estate.