Inside the $10 Million Office Dilemma Facing Prime Minister and Cabinet
The Australian government weighs high leasing costs against relocation expenses for its central agency.
1Rising Leasing Cost Pressures
The Department of Prime Minister and Cabinet currently pays $10 million annually for its One National Circuit office. This expenditure results in a $10,000 per head cost, significantly exceeding the $8,500 federal agency benchmark. With government mandates to reduce public spending, this discrepancy has triggered internal reviews regarding future accommodation strategies.
2Lease Expiry Planning Horizon
The current lease at the Barton facility is scheduled to expire in February 2033, approximately six years away. Agency leadership typically initiates formal reviews of office arrangements well before such deadlines. This timeline forces officials to decide whether to renew, downsize, or relocate to more cost-effective government-owned or managed spaces.
3Operational Footprint Changes
The agency requires fewer desks today than it did one year ago. Staff previously vacated a second office location near Parliament during the 2025-26 period. Despite this reduction in physical footprint, the department remains housed in a 15,000-square-metre building that was originally purpose-built for its specific operational needs in 2007.
4High Cost of Relocation
Moving hundreds of public servants between Canberra offices presents a significant financial hurdle. Industry estimates suggest that relocation costs, including new fitouts for joinery, ceilings, and workstations, could equal up to three years of current rent. These substantial upfront capital requirements complicate the government's goal of achieving immediate budget savings.
5Stringent Energy Rating Compliance
One National Circuit currently meets the federal government's mandatory 5.5-star NABERS energy rating for leases exceeding four years. While the building excels in energy efficiency, its water efficiency rating remains at 3.5 stars. Any potential new location would need to match these strict environmental standards to satisfy current government procurement policies.
6Historical Investment in Infrastructure
The facility underwent a major refresh in 2019, introducing modern amenities like breakout rooms, lounge areas, and a library for 1,000 staff members. These upgrades followed an initial $23 million investment in the original fitout. Such historical capital expenditure makes the prospect of abandoning the site less attractive for the department.
7Potential for Shared Spaces
Departmental sources indicate that officials have explored the possibility of sharing space with other agencies that have similar accommodation requirements. This strategy aims to optimize government real estate usage, though current assessments suggest the existing lease at One National Circuit remains functional for the agency's specific, high-security operational needs.
8Strategic Decision-Making Outlook
The dilemma highlights the tension between fiscal austerity and the practical costs of property management. As the 2033 expiry approaches, the government must balance the 15 percent premium paid over the federal average against the logistical complexity of moving a central agency. No final decision has been announced by the building owners.