2.1
The Department of Home Affairs (Home Affairs) seeks approval from the Parliamentary Standing Committee on Public Works to proceed with the proposed 101 George Street Parramatta Fit-Out. The project aims to consolidate three existing Home Affairs’ Sydney office buildings at: 26 Lee Street, Haymarket; 300 Elizabeth Street, Surry Hills; and 9-11 Wentworth Street, Parramatta, into one site at 101 George Street, Parramatta NSW.
2.2
Home Affairs state that the move aims to reduce the cost to the Commonwealth and improve service delivery efficiency.
2.3
The estimated cost of the project is $24.76 million (excluding GST).
2.4
The project was referred to the Committee on 12 May 2021.
Conduct of the inquiry
2.5
Following referral the inquiry was publicised on the Committee’s website and via media release.
2.6
The Committee received two submissions, and two confidential submissions. A list of submissions can be found at Appendix A.
2.7
On 2 July 2021, the Committee conducted a private briefing, public and in-camera hearing via teleconference. A transcript of the public hearing is available on the Committee’s website.
Need for the works
2.8
The Department of Home Affairs was created on 20 December 2017.
The Department is responsible for immigration and customs border policy, national security and law enforcement policy, emergency management, including crisis management and disaster recovery, counter terrorism policy and coordination, cyber security policy and coordination, countering foreign interference, critical infrastructure protection, multicultural affairs, countering violent extremism programs, border security and operations and transport security.
2.9
Home Affairs has been notified by the landlord of its principal office at 26 Lee Street, Haymarket, that the site is due to be redeveloped with demolition works commencing in mid-2022. In addition, Home Affairs told the Committee that the leases on 300 Elizabeth Street and 9-11 Wentworth Street, Parramatta are due to expire in March 2022 and August 2023 respectively.
2.10
In their submission to the inquiry, Home Affairs state that:
There is no compelling business requirement for Home Affairs to maintain a presence for these functions in the Sydney CBD, which currently comprises the highest rents paid by Home Affairs for office accommodation in Australia. Additionally, Home Affairs does not have enough office space across its other tenancies in Sydney to accommodate all staff and facilities post lease termination.
2.11
In addition, Home Affairs currently occupies in excess of 20 square metres per workpoint at the Lee Street and Elizabeth Street sites. This is in excess of the current Commonwealth Property Policy of 14 square metres per person, providing Home Affairs with the opportunity to reduce its overall Sydney accommodation footprint down from 22,442 square metres to 14,000 square metres.
Options considered
2.12
In considering how best to address the known future shortfall in Sydney working accommodation, whilst also using the opportunity to optimise its Sydney service delivery and general working accommodation, Home Affairs examined three options for the works. These were: do nothing, construction of a new building and fit-out of an existing building.
2.13
Option 1: do nothing, was deemed not viable as the Department would not have enough office space to accommodate all staff and facilities post the termination of the Lee Street lease. In addition, the current fit-out has been assessed as unsuitable ‘to enable back of house working functions and provides no feasible way to safely and functionally provide front of house (public) services’.
2.14
Option 2: construction of a new building was discounted as the time frame expected for site acquisition, consultant and contractor procurement, design and construction would not allow enough time for completion prior to the need to vacate the current tenancies.
2.15
The preferred option, Option 3: fit out of an existing building, was selected as it best met Home Affairs’ requirements, ‘particularly by significantly reducing the risk of replacement working accommodation being unavailable prior to the existing lease termination dates.’ The addition of a lease incentive in this option also reduces the upfront capital investment of Home Affairs.
2.16
Home Affairs conducted research in October 2019 to determine options for accommodating staff from across the three different offices, as per the preferred option 3 above. As a result of the research, 11 possible sites were identified with six being deemed unsuitable due to the timing of their availability. A comparative financial analysis was conducted of the remaining five properties (three located in Parramatta, one at Sydney Olympic Park and one in the Sydney CBD), which resulted in 101 George Street, Parramatta being selected.
2.17
Home Affairs told the Committee that consolidation of Home Affairs’ three current Sydney office locations into one location at 101 George Street Parramatta, provided the best overall property solution as it will:
… allow Home Affairs to reduce costs via efficiencies and outgoings and a reduction in overall rent, as well as being built to rightsize the net lettable area to the number of staff, in accordance with the Commonwealth guidelines for occupied work-point density.
2.18
Overall, the consolidation will reduce Home Affairs’ leased office space from approximately 22,000 square metres to 14,000 square metres, generating savings ‘of approximately $7 million per year, from a rent reduction of approximately $5 million a year and an outgoings reduction of approximately $2 million a year.’
Scope of the works
2.19
The proposed 101 George Street, Parramatta fit-out works encompass building works, furniture, fixtures and fittings, building amenity, security, and information and communication technologies as necessary to occupy and operationalise the leased working accommodation.
2.20
Specifically, the proposed works will comprise:
a.
Home Affairs Front of House (client/public facing) Services;
b.
Home Affairs Back of House Office Accommodation;
c.
Installation of approximately 1,000 to 1,100 open plan work points [at a density of approximately 13m² per person]
d.
Installation of ICT infrastructure;
e.
Construction of up to approximately 14 offices and 62 meeting rooms;
f.
Installation of breakout spaces; and
g.
Installation of security infrastructure including access control systems and CCTV cameras.
2.21
In terms of structure, Home Affairs plan to occupy levels 3-9 of 101 George Street, which includes :
…a separate staff entrance through the ground floor lobby with provisions for a security desk and security turnstiles, training and meeting rooms, workstations, secure communication facilities, secure vehicle parking spaces and bike spaces and a prayer and multi-function carers’/first aid room.
2.22
Home Affairs told the Committee that consideration has been made in the design for safety and security, with sightlines to and from spaces in Front of House Zone being critical to provide passive and active surveillance.
Staff consultation
2.23
Overall, the project will have an impact on 939 employees whose roles will be maintained in the new office location at 101 George Street, Parramatta.
2.24
When asked if staff had expressed concerns with the move to Parramatta, Home Affairs told the Committee that:
A very low number of staff have approached and said, 'I've got specific issues with movement or travel and the timing of that,' but we have not had anyone who's come forward and said, 'No, I will not move.'
2.25
Home Affairs stated that prior to the selection process the project facilitated a staff survey to gather feedback on the Sydney working accommodation, the results of which influenced the location for the new accommodation.
2.26
Throughout the project’s development, consultation occurred with Home Affairs’ employees and other key departmental stakeholders. This included the development of a number of internal stakeholder consultation and decision-making mechanisms designed to ensure the project is informed and shaped to deliver cost effective, functional and quality outcomes.
Feedback from the Community and Public Sector Union
2.27
In their submission to the inquiry the Community and Public Sector Union (CPSU) raised a number of concerns with the proposal. These include:
Increased commute times and limited public transport options due to the relocation from Sydney CBD to Parramatta
Lack of direct accessibility via public transport for clients needing to attend the service centre and the distance between relevant government front of house service desks
Lack of meaningful consultation with staff over relocation
Lack of staff consultation over accommodation layout and design, including lack of clarity over the use of hot-desking at the new site
COVID-safety of workstations and accommodation layout
No dedicated assistance to staff unable to relocate due to the impacts on their commute and attendant inability to maintain work/life balance, caring responsibilities, etc.
2.28
The Committee further discussed the concerns raised by the CPSU with representatives from Home Affairs during the private briefing and in-camera hearing and are satisfied that the Department has given adequate consideration to maintaining staff satisfaction, and attracting skilled and experienced staff.
Cost of the works
2.29
The estimated total cost of the project is $24.76 million (excluding GST), which represents $1,772 per metres squared of the Net Lettable Area.
2.30
The full cost of the project is being funded through the lease incentive provided by the landlord.
2.31
Home Affairs told the Committee that:
The lease incentive (and consequently the project budget) reflects 26% of the gross lease value based on the leased premises area of 13 974m2. Any remaining amount not spent on fit out will be used as rent reduction spread evenly over the term of the lease.
2.32
At the public hearing, Home Affairs stated that the proposed consolidation will reduce Home Affairs leased office space from approximately 22,000 square metres to 14,000 square metres, generating ‘savings of approximately $7 million per year, from a rent reduction of approximately $5 million a year and an outgoings reduction of approximately $2 million a year.’
Revenue
2.33
Home Affairs told the Committee that ‘while the works will support the provision of services which generate revenue, the works will not result in a net difference in current revenue generated’.
Committee comment
2.34
The Committee was pleased that the proposal will reduce the Department’s total Sydney accommodation footprint down to 14,000 square metres, generating saving of approximately $7 million per year. The Committee was further encouraged to see that staff would be accommodated in an individually assigned desk at a density of 14 metres squared, in line with the Commonwealth Procurement Policy.
2.35
Home Affairs is encouraged to continue to engage with staff that have raised concerns with the move, to ensure all concerns are taken on board, and where possible, staff needs are accommodated.
2.36
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.
2.37
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.
2.38
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: Department of Home Affairs, 101 George Street, Parramatta Fit-Out, NSW.
that the Department of Home Affairs continue to engage with staff to ensure all concerns are taken on board and to take meaningful steps to facilitate the redeployment and retraining of workers unable to relocate.
2.39
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.