National

John Gorton Building set to be Canberra's newest phantom office block

Australian Heritage Council boss Carmen Lawrence warns that moving Finance Department staff out of the John Gorton Building could be a false saving driven by short-term thinking.

The John Gorton building is one of six properties the federal government is considering selling.
The John Gorton building is one of six properties the federal government is considering selling. Photo: Melissa Adams

Taxpayers have just spent millions of dollars fixing parts of the Finance Department's dilapidated main building, much of which could soon be deserted. 

Dr Lawrence said the Commonwealth was obliged by legislation to continue sinking money into the massively degraded office block even if there was an exodus of hundreds of public servants because its heritage value was set out in the Environment Protection and Biodiversity Conservation Act.

"There's a real problem with short-term thinking - a tendency to overlook sunk costs," Dr Lawrence said. 

"Giving a building another 50 to 100 years is often a smarter thing to do.

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"Even if they want to sell (the building) they need to spend the money to bring it up to standard."

Dr Lawrence said the Commonwealth was not properly prepared for the heritage implications of the mass consolidation of nationally-owned properties across the Australian bureaucracy as recommended by the Commission of Audit.

She said there was not enough public servants working on heritage issues in the Environment Department. 

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The Finance Department wants to consolidate its 1400 full time equivalent staff from the John Gorton Building and several other locations into 20,000 square metres of space at the newly built building at 1 Canberra Avenue.

Finance's submission to Parliament's public works committee said this would avoid disruption to staff and $220 million cost to upgrade the John Gorton Building to A-grade standard which was "simply not available".

The Finance Department's submission said upgrading the John Gorton Building would cost the Commonwealth government less on a "whole-of-life" basis than shifting to 1 Canberra Avenue.

Moving to 1 Canberra Avenue was, however, the cheapest option over the forward estimates and could be achieved through existing departmental funds.  

Finance's submission had further cost-savings reasons to consolidate staff at 1 Canberra Avenue, arguing it would be better for workplace operations and culture.

This included a planned annual saving of $1.7 million in security, cleaning and mail services as well as other costs associated with operating the property and the use of fleet vehicles.  

It would allow Finance's staff to leave a host of buildings which were not A-grade and did not meet the best environmental standards and ensure the agency had one public servant for every 14 square metres - the latest  Commonwealth standard.

Finance's submission said the organisation had absorbed the savings related to the 2010 decision to reduce the occupied work point footprint to 16 square metres per public servant.

"Finance now risks having to absorb further costs as leases are renewed at sites such as (the John Gorton Building) due to the 2013 decision to reduce the occupied work point footprint to 14 square metres."

1 Canberra Avenue developer Willemsen Group offered a fitout of up to $32 million to attract Finance to its new building and lease costs were expected to be about $400 a square metre - slightly lower than the market price, according to sources. 

Taking the 600 Finance bureaucrats out of the John Gorton Building would leave the Commonwealth with another expensive building with a high vacancy rate.

Each of the 1000 Environment Department employees left in the outdated structure after Finance departed would account for 36 square metres.

Already the Commonwealth was spending hundreds of thousands of dollars annually on the Anzac Park East building in Russell which had been empty for 20 years. 

On Monday commercial real estate agent Andrew Stewart, CBRE Canberra managing director, said Anzac Park East should be used for something.

"It'd make a great hotel but you probably don't need too many more hotels in Canberra at the moment," Mr Stewart said. 

 
 

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