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🇦🇺 Australia /Economy & Trade

ATO questioned over 'extravagant' $73m Adelaide office move

From ABC Australia · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • The Australian Taxation Office (ATO) faces scrutiny over a $73.4 million fit-out for a new Adelaide office.
  • Critics question the expense, noting the current office was built less than 15 years ago with a significant fit-out.
  • The ATO plans to downsize its office space by 40% in the new building, citing long-term cost savings.

The Australian Taxation Office (ATO) is under fire for its plan to spend $73.4 million fitting out a new office in Adelaide's upcoming skyscraper, Festival Tower Two. This expenditure is being questioned because the ATO's current office, occupied by over 2,200 staff, was constructed in 2012 and already received a $54.2 million fit-out.

Frankly, the tax office should be cutting its cloth to suit the times that we're in rather than indulging itself in the level of extravagance that appears to be involved in the deal it has struck with Walker Corp on tower two.

— Geoff HayterLand economist Geoff Hayter criticized the ATO's relocation costs.

With its lease on Franklin Street expiring in November 2027, the ATO has signed a deal to relocate to Festival Tower Two, a 38-storey building developed by Walker Corporation. The tax office stated this move would downsize its Adelaide office space by approximately 40%, from 31,000 to 19,000 square meters, which it claims will result in "substantial long-term property cost savings."

However, the leasing arrangement has raised concerns about value for money. Property experts suggest that Walker Corporation is likely charging premium commercial rents for Festival Tower Two, marketed as Adelaide's first and only "premium" grade office building. Land economist Geoff Hayter estimated rents could exceed $900 per square meter.

It's premium space, it's being touted as the best building in Adelaide … and I don't see why the tax office needs to occupy the best building in Adelaide.

— Geoff HayterHayter questioned the necessity of the ATO occupying a top-tier building.

Hayter, who opposes the development, described both the rent and the $73.4 million fit-out as "extravagant." He questioned why the ATO needs the "best building in Adelaide" and why it couldn't continue using its current premises, which he suggested might still be viable with some refurbishment. The ATO's decision to vacate a relatively modern building for a new, high-cost fit-out is facing significant public and parliamentary scrutiny.

It may well be that some of the fit out there is actually still usable with a bit of refurbishment.

— Geoff HayterHayter suggested the current ATO office fit-out might be salvageable.
DistantNews Editorial

Originally published by ABC Australia in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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