One of the strongest statements of this principle was made by the representative of the Ministry of Finance and Deregulation at the Parliamentary Inquiry into the Disposal of Defense Properties: An ongoing goal of government policy is to reduce its property holdings throughout Australia...The Commonwealth is not a property company. [There] is an opportunity cost of capital and the Commonwealth has determined there are better things for it to do than be a property holding company.

**Annual Land Audit.** This principle has been translated into practice by a series of regulatory and administrative measures.  Central to the process was the establishment of a Commonwealth Land Audit.  Each year, all agencies of the Commonwealth government must report to the Ministry of Finance and Deregulation their landholdings _and_ provide a written justification of why these landholdings are necessary or efficient to provide the services for which they are responsible. This justification takes the form of a “business case” for land retention.

**Business Case for Land Retention.** The Ministry of Finance and Deregulation has provided standard guidelines for how the business case should be made. The property-owning agency must demonstrate that it is cost-effective for service delivery to retain land ownership, taking into account alternative ways to provide its services and alternative uses for the land outside of Commonwealth ownership.   The Ministry of Finance prescribes the financial and economic variables to be used in making the business case, including opportunity costs and discount rates. The own vs. sale land decision is embedded in a broader policy of obtaining Value for Money in public property management.  For example, the Ministry of Finance and Deregulation has prepared and disseminated throughout government a _Better Practice Guide on the Strategic and Operational Management of Assets by Public Sector Entities_ <u>(2010).</u>

**Changing Emphasis on Land Disposition.** It is interesting to note a change of emphasis that accompanied Labour’s ascendance to power in 2005.  The Annual Land Audit was retained, as was the statement that “Government’s core business excludes property ownership,” but added to this statement was the qualifier “unless particular circumstances apply.”  Labour has continued the policy of requiring that Commonwealth agencies demonstrate a business case in favor of retaining land parcels.  However, it has shifted disposal policy, as part of its National Urban Policy, to give priority to releasing surplus Commonwealth land to local governments or non-profit organizations that will use it to increase housing supply or support community development.

In their reports for the Commonwealth Land Audit, agencies are now required to report which land parcels fail to meet the business case for retention and, of these, which are suitable to advance housing or community outcomes. These properties are eligible to be transferred to local authorities or community organizations at less than full market value.

**Leasing of Public Land.** One topic that receives a good deal of attention in Australia’s land audit is the leasing of public property to private parties.  Throughout the world, public property that is leased to private users tends to be priced well below market rents (Peterson and

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