Friday’s Canberra Times carries a story about the $50 million blowout in the cost of the Australian War Memorial extensions project, for which the then government budgeted $498 million. There were hints in the last two Budget papers that costs were rising. There are hints, too, in the quoted comments of Memorial Director, Matt Anderson, that there will be more cost increases.
The letter below to the Federal Treasurer and Minister for Finance urges the government to put a cap on spending on the Memorial project and to look closely at possible savings. The project, originally a ‘captain’s pick’ under pressure from a billionaire and an ex-politician looking to leave a legacy, has escaped proper scrutiny behind the protective ‘Anzac cloak’. It is time to rein it in.
2 July 2022
Updates since the letter
Update 29 September 2022: Announcement from Minister and Memorial on geothermal heating also touches on how the Memorial intends to treat Frontier Wars in the future. Also some comments on cost blowout and how government might respond to any future requests for more money – of which there have been none to this point. Some extracts from the transcript of the press conference:
JOURNALIST: That $10 million, we’ve seen the original price for the whole project and the renovations is $500 million, and it’s gone up to $550 recently. Is that within that or is it another 10 on top of that?
MATT ANDERSON [Director]: No, it’s within that.
JOURNALIST: Do you anticipate you’re going to need more money?
MATT ANDERSON: We are doing everything we can to make sure that we stay within the budget of $550 million. I’m very, very proud of the team that’s working on this. The work that they have done to value manage this project at this point in time is extraordinary. They have looked to make sure that every cent we spend has been well spent. And at this stage we are working as hard as we can possibly work to achieve the design and the build outcomes within the $550 million.
JOURNALIST: Minister, if they do come to you asking for more in unforeseen circumstances, will the Federal Government fork out the extra cash?
MATT KEOGH: Well, obviously the additional 50 has come about because we’ve had some pretty significant price increases, inflation, cost escalations and everyone involved in any construction project across the country right now has been confronting. And I want to commend the War Memorial on the work they’ve been doing to really keep those cost escalations as low as possible … There’s no current ask on government for additional funds. And I know because of the great management of the project that they’re going to be able to bring this project to completion within that envelope …
JOURNALIST: [Indistinct] more money what will be the process?
MATT KEOGH: Look, the War Memorial is a Government entity like any other. If they have ongoing or additional needs, they come to government as part of an ordinary budget process. And if that happens in the future – and we’re not foreshadowing that that would – the government would look at that at the time that a request was made.
JOURNALIST: I’m sorry, did you say you’re not foreshadowing that that will happen?
MATT KEOGH: I’m not foreshadowing nor have we had any request made of government at this stage. But as with any government agency, if they make requests they go through ordinary budget processes.
Update 29 September 2022: Two articles (Part I; Part II) from Honest History/Heritage Guardians on the secret $50m increase in the Memorial project budget in the dying days of the Morrison government. Together they show: apparent contradiction between the Memorial and the Minister’s office on whether the $50m increase was ‘additional’; suggestion that they tried to bury the increase in an equity injection; some tips from the Memorial on how to bluff Senate Estimates; and how to use tender processes to keep cost increases quiet. Some tips also for the Albanese government on how to avoid similar ploys in future. Extract below:
The history of the lazy $50 million increase of March 2022 suggests that the Albanese government needs to monitor closely:
- whether routine equity injections are used to hide increases in project funding requirements that should have been covered by contingency planning or that are just being ‘snuck through’ opportunistically, for example, when government is about to change hands (rather like last-gasp appointments to government bodies);
- whether current or pending contract negotiations are being used as an excuse for not releasing information about project funding increases, particularly when there are other reasons for suppressing such information, for example, when a project is controversial and news of cost increases could embarrass the project proponent (here, the Memorial), the government, or both; and
- whether sufficient evidence has been provided to justify claims that global or national or sectoral cost increases are affecting the costs of a specific project to the extent that it needs further money from government.
Update 14 September 2022: Micallef had brief mention of War Memorial build at mark 21.0.
Update 1 September 2022: Chris Knaus in Guardian Australia reports recent warning from David Smith MP that Memorial cannot expect ‘blank cheque’. Memorial on the defensive but notes possibility of further cost increases.
Update 11 July 2022: Karen Barlow in the Canberra Times provides a comprehensive round-up of the cost blowout. Minister is watching Memorial closely; Memorial is being cagey.
And this from Don Watson in an article in The Monthly (July 2022), ‘How to be a Prime Minister’, setting out an agenda for the Albanese government:
By contrast, the ideas of an open society and a liberal democracy, held in common by Bob Hawke and a real Tory, Malcolm Fraser, made for a “good” multicultural Australia. And for Robert Menzies, a conservative philosophy was no impediment to creating and generously funding public institutions essential to any country’s flourishing and worth, which recent Coalition governments have made a point of running down. Labor, which began the rot with its “efficiency dividends” in 1986, should make it a priority to run them back up again. It could begin small: call off the $500 million “extension” to the Australian War Memorial and give it back its solemn dignity. With 20 of the 500 million dollars, add the Frontier Wars to all the others it memorialises, and use the balance to pay down debt or rebuild the institutions where all the other – non-military – parts of Australia’s story can be found.
Update 8 July 2022: A non-committal reply has been received from a mid-level public servant in the Department of Finance on behalf of Minister Gallagher.
The Hon. Dr Jim Chalmers MP
CANBERRA ACT 2600
Senator the Hon. Katy Gallagher
Minister for Finance
CANBERRA ACT 2600
Congratulations on your appointments. I am writing to you in connection with your joint role to review government expenditure prior to the Budget later in the year.
You will be aware of the commitment by the former government of $498 million to build extensions to the Australian War Memorial. This project is well under way, notably with the demolition of Anzac Hall, the destruction of dozens of trees, and the excavation of large holes. According to the Director of the Memorial, quoted in yesterday’s Canberra Times, the project costs have already blown out $50 million beyond the original figure, and there are strong hints that further cost increases are to be expected. While the Director admits this amount of $50 million came from the then government in March this year, Budget papers for the past two years show there have been increased capital injections to the Memorial totalling $308 million.
I am writing to you as editor of the Honest History website (nine years arguing that Australia is more than Anzac and always has been) and on behalf of the Heritage Guardians group, which campaigned against the Memorial extensions project. We do not believe – despite the demolitions and excavations – it is too late to change the project’s direction. I urge you to:
- cap expenditure on the War Memorial project – that is, to make no further capital injections to the Memorial nor any other subventions that might go towards the project;
- closely investigate where savings might be made on the project, up to and including scrapping some or all proposed new construction;
- require the Memorial to account, publicly and annually, separate from the Budget process, for how the amount of (now) $548 million is being spent.
Only through such accountability can the Memorial live within its means and Australians, opponents and supporters of the project alike, be satisfied that the Memorial can continue to be an institution worthy of those whose names are inscribed on its Roll of Honour.
In view of the importance of this matter, I have copied this letter to the Prime Minister and the Minister for Veterans’ Affairs.
(Dr) David Stephens
Editor, Honest History website; on behalf of Heritage Guardians
2 July 2022