Victoria Barracks in Sydney and Melbourne to remain in public hands after partial backtrack on defence property selloff
Four heritage-listed defence properties, including Sydney’s Victoria Barracks and Melbourne’s military site, have been preserved for community use after facing significant backlash from veterans, former prime ministers, and advocacy organisations.
Background: Audit identifies underused sites
A multi-year audit completed in 2023 assessed Australia's defence estate and found that over 60 sites were underutilised by the Department of Defence. These locations lacked a clear connection to current or future operational capabilities and cost millions annually to maintain.
The independent review concluded that these legacy sites were ‘draining resources’ from higher-priority defence needs and described today’s estate footprint as comprising numerous properties without an ongoing strategic function.
Sale plan and public opposition
Initially, the Albanese government planned to sell off 26 major metropolitan defence sites—including those at Randwick (Sydney), Sandringham and St Kilda (Melbourne), Petrie Terrace (Brisbane) and Fremantle (Western Australia)—to raise up to $2.4bn. The total expected revenue from all sales was estimated at $3bn, with Sydney and Melbourne Victoria Barracks alone projected to generate $1.3bn due to their prime city locations.
The sale of these properties aimed to save approximately $3bn in maintenance and security costs over a ten-year period, with plans for land repurposing towards new housing developments—targeting 6,000 dwellings long-term.
Government reversal amid public pressure
Ahead of an important cabinet meeting on the budget, Prime Minister Anthony Albanese confirmed that four sites—including Victoria Barracks in Sydney and Melbourne, Fort Queenscliff, and RAAF Base Point Cook—will remain publicly owned after defence personnel vacate them.
In a statement, Albanese said Victoria Barracks held ‘a special place in our nation’s history’. Defence Minister Richard Marles added that the military must prioritise spending on national security over asset sales. He stated: 'Given the strategic landscape we face, we cannot afford to be wasting money. We need to look at how we best use defence money for defence capability.'
Community and heritage advocacy
The decision drew strong opposition from public campaign group Save Victoria Barracks Sydney, veterans’ organisations, and former prime ministers John Howard and Paul Keating.
Shadow defence minister James Paterson noted that while this outcome is positive for defence heritage, it does not resolve broader concerns about other critical sites such as HMAS Penguin, Lancer Barracks, and Irwin Barracks. He said: 'The Coalition will continue to fight to save other critical defence sites, including HMAS Penguin, Lancer Barracks, Irwin Barracks, and more.'
National leadership response
New South Wales opposition leader Kellie Sloane described the Victoria Barracks site as an ‘irreplaceable part of our military heritage’ that must be protected for future generations. She stated: 'Our military heritage and defence capability must come before a short-term cash grab.'
Future use and transformation plans
The government has committed to working with the Australian War Memorial once personnel vacate these sites to transform them into public spaces that preserve and share Australia’s military history.
Contextual economic environment
The announcement comes during cabinet's expenditure review committee meeting, following a rise in the official interest rate to 4.85%—an 18-year high—to combat persistent inflation. The treasurer, Jim Chalmers, attributed rising fuel prices driven by Middle East conflict as the primary cause of inflation, not budgetary policy.