4.1
The Administrative Appeals Tribunal (AAT) seeks approval from the Committee to proceed with the proposed fit-out of leased premises at 15 William Street, Melbourne, Victoria. The fit-out includes office space, hearing rooms, dispute resolution rooms, meeting rooms and associated facilities.
4.2
The estimated cost of the project is $15.68 million (excluding GST).
4.3
The project was referred to the Committee on 16 February 2017.
Conduct of the inquiry
4.4
Following the referral, the inquiry was publicised on the Committee’s website and via media release.
4.5
The Committee received one submission and one confidential submission from the AAT. A list of submissions can be found at Appendix A.
4.6
On 31 March 2017, the Committee conducted a public and in-camera hearing with AAT. A transcript of the public hearing is available on the Committee’s website.
Need for the works
4.7
New purpose-built space for the AAT would allow judicial and administrative activity in Melbourne to be conducted at one location. On 21 December 2016, AAT entered into a ten year lease for 7,183 square metres of space at 15 William Street with an option for two five year extensions.
4.8
On 1 July 2015, the former Migration Review Tribunal (MRT), Refugee Review Tribunal (RRT) and Social Security Appeals Tribunal (SSAT) and their respective functions were amalgamated into the AAT. As a result, the AAT is currently spread across four separate locations in Melbourne.
Table 4.1: AAT’s presence in Melbourne
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City Road, Southbank
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Freedom of Information Division
General Division
National Disability Insurance Scheme Division
Security Division
Taxation and Commercial Division
Veteran’s Affairs Division
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Bourke Street, Melbourne
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Social Services and Child Support Division
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Collins Street, Melbourne
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Principal Registry
Some AAT Review Support teams
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Spencer Street, Melbourne
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Migration and Refugee Division
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Source: AAT, Submission 1, p. 13.
4.9
The AAT stated that consolidation of the Melbourne offices would create savings and efficiencies:
One of the main objectives of the amalgamation is to achieve cost savings to government through reducing property operating expenses as well as achieving operational efficiencies. … We will reduce our total footprint in Melbourne by over 2,000 square metres… We will be able to share resources across divisions. Through a more efficient allocation of space, we will be able to reduce the number of hearing and alternative dispute resolution rooms that we have.
4.10
The AAT’s submission noted some additional benefits and opportunities of consolidating its Melbourne offices:
The ability to install audio-visual equipment and teleconferencing in hearing rooms and member offices;
The integration of client services into a single team;
Reducing the number of hearing rooms from 36 to 26 and greater efficiency of room allocation; and
Improved occupational density per occupied work point, from 25.5 square metres to 17.2 square metres.
Options considered
4.11
The AAT considered four options.
4.12
The first option was to continue leases at existing premises, which the AAT ‘did not consider… to be a viable option’ because of the inefficiencies of maintaining operations at four locations.
4.13
The second option was to move operations into the current Spencer Street location. The AAT said this option was precluded:
The lessors of 120 Spencer Street were, however unable to offer sufficient vacant space to house all of the AAT, and so it was not an option to establish single-building operations at 120 Spencer Street.
4.14
A third option involved maintaining a presence at Spencer Street and a second location in the vicinity. The Spencer Street office would have required a partial fitout and a property search could not identify a suitable second office. The AAT said:
We costed that out, as compared to moving to a single-building solution. The cost-benefit analysis demonstrated that a single-building solution was preferable not only fiscally but also to achieve the policy aims of amalgamation.
4.15
The AAT decided to consolidate into a single building operation to maximise operational efficiencies, integrate operations and save on property expenses.
Scope of the works
4.16
The AAT has proposed to build the following facilities on levels 4, 5, 6 and half of level 11 of 15 William Street:
26 hearing and alternative dispute resolution rooms of varying sizes for the conduct of review proceedings;
A public reception, waiting area and multiple interview rooms to support the hearing rooms;
A publicly accessible ‘summons rooms’ in which parties to tribunal proceedings can view and copy documents held by AAT;
A legal library which will be accessible to members of the public as well as staff and members;
178 workstations in open plan areas for APS1-EL1 and certain EL2 staff accommodation;
65 enclosed offices of varying sizes as accommodation for members and senior managers;
Several breakout rooms and kitchenettes to support staff and members, and the hearing rooms;
Seven staff and member meeting rooms of varying sizes for the conduct of internal meetings;
A large training room for the conduct of staff and member training sessions;
IT server and storage rooms to support the operations of the AAT;
A secure store room designed for the storage of security classified documents; and
Other store rooms and utility points to support AAT operations.
Cost of the works
4.17
The project has a budget of $15.68 million (excluding GST). This figure is inclusive of fixtures, fittings and furniture, design and project management fees, design contingency, relocation costs, internal resourcing and risk estimation costs. The AAT intends to fund the proposed works from a commercial lease incentive and from existing capital funding.
4.18
The overall budget equates to a refit cost of $2,182 per square metre. When non-construction costs including contingencies, relocations, fixtures and fittings are excluded, the cost per square metre is reduced to $1,694 per square metre.
4.19
The AAT provided further detail on project costings in its confidential submission and during an in-camera hearing.
4.20
The Committee is satisfied that the costings for the project provided to it have been adequately assessed by the proponent entity.
Committee comment
4.21
The Committee did not identify any issues of concern with the proposal and is satisfied that the project has merit in terms of need, scope and cost.
4.22
Having regard to its role and responsibilities contained in the Public Works Committee Act 1969, the Committee is of the view that this project signifies value for money for the Commonwealth and constitutes a project which is fit for purpose, having regard to the established need.
4.23
The Committee recommends that the House of Representatives resolve, pursuant to Section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed works: proposed fit out of leased premises for the Administrative Appeals Tribunal, 15 William Street, Melbourne, Victoria.
4.24
Proponent entities must notify the Committee of any changes to the project scope, time, cost, function or design. The Committee also requires that a post-implementation report be provided within three months of project completion. A report template can be found on the Committee’s website.
Chair