Tuesday 29 May 2012 - Budget Estimates - DFAT

Defence Housing Australia

CHAIR: We will now move to questioning of Defence Housing Australia. Thank you very much, gentlemen. You know the drill, so I am not going to repeat the blah. We will go straight to questioning. Senator Ludlam?
Senator LUDLAM: I only have a couple, and this might test you a little bit-this is one particular property, or sets of properties, in Fremantle, from a little way back. I understand that Defence was progressing with the sale of townhouses located along Queen Victoria Street and two cottages on Tuckfield Street. There was a proposed sale to the WA Department of Housing and they bailed out of, I understand, in 2009-10. Are you familiar with those properties? They are kind of at the gateway to Fremantle.
Mr Howman : No, I am not. We have over 18,000 properties in our portfolio.
Senator LUDLAM: This is quite important from a Fremantle perspective. It is kind of the entry statement to Fremantle. I do not know if you are familiar with that part of the world? Could you check and see if you have any records at the table with you about this particular property, otherwise I will just ask you to take a batch on notice.
Mr Howman : Are these priority sale properties from Defence to DHA or are they a sale from DHA to the public?
Senator LUDLAM: I think it was going to be a sale from DHA to the public, but you can correct me if I am wrong on that. It did not work out.
Mr Howman : I do not have any detail on that with me today.
Senator LUDLAM: I will put a bunch on notice.
Mr Howman : Could you repeat the addresses.
Senator LUDLAM: It is all the one property. It is Queen Victoria Street and Tuckfield Street in Fremantle. My understanding, and correct me if any of this is incorrect, is that Defence Housing sought to sell those properties down to the WA Housing Department in 2009-10. I am seeking to know what has happened since then. These are basically heritage properties that are falling apart. They are in quite a prominent part of Fremantle. They are kind of the entry statement from the east. I would like to know how long the properties have been vacant. As you would be aware we have a pretty serious housing crisis going on in WA.
Mr Howman : Are these the heritage properties that are the Gunners' Cottages in Fremantle, where there is an old Army establishment?
Senator LUDLAM: Yes, I suspect they are the same ones.
Mr Howman : If it is those particular properties there are about 10 cottages there, which are in fact heritage properties. The subject of sale is actually from the Department of Defence to DHA. That has not moved forward at this stage. DHA has expressed an interest in those in the future. It needs to go through some process to see whether they are the sort of house we would want to take into our portfolio. It is my understanding that if it is the Gunners' Cottages they have been vacant for quite some time. They are in a rundown state. It is DHA's intention that if we can come to an arrangement with Defence to actually take those into our portfolio we would purchase them from Defence at the market rate and then we would give them an uplift.
You are right in saying that they are quite run down. They need quite a lot of work on them, and they are an entry statement to Fremantle. They could do with a lift up. We would look at them for housing for Defence members. That is if they are the ones you are talking about.
Senator LUDLAM: It sounds like they are.
Mr Howman : I have just done a Google search and they are the ones we are talking about.
Senator LUDLAM: If they have not yet been past you and they might not be, you might evaluate them presumably from DHA and decide you do not want them. Then I would have to put my questions to Defence.
Senator Feeney: Defence estate is one of my responsibilities.
Senator LUDLAM: So, Minister, you are going to cop it whichever way this goes. My understanding is that they did try to sell them directly to the WA Department of Housing, and they opted out of the sale.
Mr Howman : I could not comment on what they have done in the past.
Senator LUDLAM: You would not yet have been in a position to make an estimate on what kind of works would be required to bring them up to scratch for occupancy?
Mr Howman : We have done some very initial estimates. They are not very detailed, but you are talking in the millions of dollars. They have not been inhabited for many years. I have walked around them for a look. There are boards falling off the rails and so forth. They are not about to fall down, by the way, because they are a very solid building. It is just the infrastructure that surrounds them-the verandas and so forth.
Senator LUDLAM: You would have some pretty big friends in Fremantle if you decided to take them on and do them up-including me. I would certainly encourage that evaluation. Are you waiting for Defence, or are they waiting for you. Where is the process hung up?
Mr Howman : Just last week we received the latest valuation on them. Defence will get their independent valuation also. We will look at those valuations and then we will come to some sort of arrangement as to what the sale price should be.
Senator LUDLAM: So this is in play right now?
Mr Howman : Absolutely. It is in play right now.
Senator LUDLAM: Are you aware whether or not any maintenance has been undertaken by Defence, or are they just letting these properties fall to pieces?
Mr Howman : I would say that Defence do not let them fall to pieces, because it only devalues the property. But my observation in driving past is that maintenance has been taken out. I can point out specifically that some fences have been put around the properties to keep people from going into them. So, yes, maintenance is being carried out.
Senator Feeney: The Defence maintenance budget is under great pressure and that pressure is only intensifying.
Senator LUDLAM: Our agenda is to get this back into tenancy. It sounds like that might be in play in the background, which would be great. Is there any consideration as to what kind of use you would put it to? Is there potential there for commercial leasehold or are you just looking at rental.
Mr Howman : We would look at housing Defence personnel there. They are very well located for the CBD, for HMAS Leeuwin and even for Karrakatta and also for SAS, Swanbourne.
Senator LUDLAM: If you would provide us with information on notice, because it sounds like we are having this conversation a week or two before some things might happen. If there is anything you want to provide the committee with by way of follow-up that would be appreciated. We are really looking for some kind of indicative timetable of when they might be brought within your ambit and repaired.
Mr Howman : Sure. There are a lot of steps to go through along the way. For example, we will need to get Public Works Committee approval to spend once we have acquired the property.
Senator LUDLAM: Maybe I should get myself on that committee.
Mr Howman : The timing at this stage would need to be flexible.
Senator LUDLAM: Are we talking years or decades?
Mr Howman : Definitely not decades. We are talking in the short years.
Senator LUDLAM: These were formerly Defence housing properties.
Mr Howman : They still are owned by Defence.
Senator LUDLAM: Is there any reason people are not living in them? Do you know why they have been allowed to fall into the state they are in?
Mr Howman : They do not meet the Defence housing requirement today. Some work needs to be done to bring it up to the standard that we need for Defence Housing to meet the needs now. I would imagine that is the reason. But they were made vacant well before I joined DHA.
Senator LUDLAM: We might return to this in a later session.
Mr Howman : I look forward to that.
Mr Jenkins : I have responsibility from the Defence side for this, so I can give you a little bit of information, although I am not right up with the sale process. Those houses, as DHA have said, do not meet the current standard and they have not met our housing standards for quite some time, so they have not been used. In regard to maintenance we are doing very low-level maintenance just to make sure that the fundamental structure does not completely fall apart-mowing the lawns and doing all of that sort of thing. But there is clearly a need for major refurbishment before they would be appropriate for housing. We are actively pursuing a process with DHA now.
Senator LUDLAM: Do you have any sense of how many people you could accommodate there once they have been done up?
Mr Howman : There are 10 cottages, so we could house 10 families there. Or we may choose to use them for singles accommodation.
Senator LUDLAM: Unless anyone has more to offer? I wish Defence were more forthcoming on some of the other issues I brought to the table over the last couple of weeks.
Senator Feeney: You have done very well. You have a one-stop shop for answering all of your questions.
CHAIR: That concludes Defence Housing and we will suspend for dinner and return with the Department of Veterans' Affairs.
Proceedings suspended from 18 : 29 to 19 : 31