ATO Adelaide office: $73.4m fit-out, 15 years after the last

The Australian Taxation Office is moving its Adelaide office out of 26 Franklin Street, a building it moved into new in 2012, and into Festival Tower 2, a 38-storey tower not yet built behind SA Parliament House. The ATO's fit-out of 11 floors is forecast to cost $73.4 million, according to its submission to Parliament's Public Works Committee.

The fit-out of its current Franklin Street office was estimated at $54.2 million when the same committee recommended it in 2010. That's $127.6 million on two fit-outs of the ATO's Adelaide office in about 15 years (an Aussie Outrage calculation, adding the two estimates).

In a report presented to Parliament on 27 October 2026, the committee recommended that the new fit-out go ahead. In the same report, it asked the Auditor-General to consider auditing how the ATO manages its property, saying the committee "has concerns about the ATO's overall approach to the identification of new sites and its exit strategies from leases of existing sites".

Two ATO Adelaide office fit-outs in 15 years

The figures come from the committee's 2010 and 2026 reports, the ATO's 2026 submission, and the ATO's evidence at the committee's hearing in Melbourne on 8 July 2026. The ATO's lease at Franklin Street expires in November 2027. The new lease starts on 1 November 2027.

Why is the ATO moving?

The ATO says its current fit-out is worn out. In its 2026 submission, the ATO says the Franklin Street fit-out "is not consistent with a modern workplace for technology, amenity, collaboration, serviceability or flexibility, and will be end-of-life by lease expiry". It says the desks are "14 years old".

It wants a lot less space. Office space shrinks from 31,488 to 19,000 square metres, a 40% cut, according to the committee's October 2026 report. The ATO's submission says unallocated desks under its 2024 enterprise agreement, "coupled with continued strong uptake of working from home", will "achieve substantial long-term property cost savings for the ATO, without any loss of jobs". The new office has 1,400 desks, with capacity for about 2,370 staff.

It says staying wasn't an option. Adrian Jeczewski, the ATO's assistant commissioner for sourcing, commercial services and leasing, told the committee its option to extend at Franklin Street "means that we have to utilise the full space we have currently". The ATO said renegotiating for less space wasn't something it had "a strong position on", so it went to market in August 2024. Mr Jeczewski said it received three expressions of interest.

It says the price is normal. Asked about the cost, Liam Page, the ATO's assistant commissioner for property, told the committee the fit-out was "similar to costs of other fit-outs that have been delivered for the ATO recently". The ATO's project manager, Cushman and Wakefield, said it sits "within the mid range".

"The most premium fit-out that I've ever seen"

The committee's deputy chair, Andrew Willcox MP, said it at the hearing on 8 July 2026: "This committee's role is to get value for money for our taxpayers. Having a look through the document, there's a very good presentation, but this is the most premium fit-out that I've ever seen."

The plans include a 250-person conference room, a secure lobby with "race gates and guarding", and 40 car parks for ATO use, according to the committee's report. Mr Page told the committee that "generally speaking, we don't have clients attend the office, except perhaps for interviews and the like", and that the conference room would be used for "corporate events" and "planning days".

On our sums, the fit-out works out at about $3,860 per square metre and about $52,400 per desk (Aussie Outrage calculations: $73.4 million divided by 19,000 square metres, and by 1,400 workpoints).

Geoff Hayter, a valuer and member of the Save Festival Plaza Alliance, told the committee the cost was "almost $4,000 per square metre as against, I understand, the mandated maximum rate in the ATO's own documents at $2,600 a square metre". We haven't been able to find that limit in a published ATO document.

What rent is the ATO paying?

It hasn't been made public. Neither the ATO nor the developer, Walker Corporation, has disclosed the rent at Festival Tower 2, the ABC reported in July 2026. The cost of the current lease with Charter Hall isn't public either.

Mr Hayter told the committee that "no-one knows what rental deal has been agreed", but that "it's understood" Walker Corporation had been seeking $950 to $1,000 a square metre, against about $750 for other new, good-quality Adelaide offices. Those are his estimates, not published figures. When another critic, Craig Pickering, told the committee a better deal could have been done with the current landlord, the committee chair, Tony Zappia MP, pushed back: "Again, you're making statements, but I want very clear evidence to confirm what you're saying."

When Mr Willcox asked for numbers showing the advantage of moving, Mr Jeczewski offered to take on notice "some headline numbers around how much we pay for the lease, currently, from a lease perspective, and how that will compare with the new lease". It gave the committee details of its options and costs in confidential evidence, according to the report.

What happens if the ATO's Festival Tower office isn't finished?

The ATO's lease at Franklin Street ends in November 2027. At the July hearing, Mr Page told the committee the ATO was "working through changes to project timeframes". Mr Jeczewski said the ATO was "actively looking at what contingencies need to be put in place if we cannot move in, based on the current milestones and timeframe". The ATO gave the details to the committee in confidence.

Some submitters argued the tower wouldn't be finished in time because it didn't have all its approvals. South Australia's planning minister, Nick Champion, disputed that in a submission to the committee. He said the State Commission Assessment Panel approved the project on 11 June 2025, and that the matters still outstanding were "neither unusual nor indicative of any deficiency in the approval".

What did Parliament's committee find?

The Public Works Committee backed the fit-out. Its report says "the evidence given to the Committee demonstrated that the ATO has undertaken sufficient value for money assessments", and that the ATO "was unable to receive sufficient assurance that a refurbished office fit-out at its existing premises could meet all of its essential requirements".

The committee also said its concerns about the ATO's property decisions extend to tenancies "that have been deemed 'end of life' after what seem like relatively short lease and tenancy timelines". It recommended the Auditor-General consider an audit of "the management and administration of the Australian Taxation Office's property portfolio, lease arrangements and location strategy".

It said it was "unclear from the evidence whether the ATO undertook any community consultation", and was concerned about that given "the well-publicised public opposition to the Festival Tower 2 development". When Mr Willcox asked at the hearing whether the ATO had done any community consultation, Mr Page answered: "Not as part of our approach to market."

The committee said the Festival Tower development itself "is a matter for the South Australian Planning Commission" and expressed no opinion on it.

For scale

The same committee report covered another government office fit-out. The Department of Employment and Workplace Relations' fit-out of 46,389 square metres in Canberra is estimated at $153.5 million, according to the committee. That's about $3,310 a square metre, against about $3,860 for the ATO in Adelaide (Aussie Outrage calculations: each cost divided by its floor space).

The ATO is paying for its new fit-out "within existing departmental funds", according to its submission: there's no extra money for it, so it comes out of the ATO's existing budget.

For a far bigger federal office bill, see the Reserve Bank's Martin Place renovation, now budgeted at $1.17 billion. For other government projects that cost far more than first promised, see the blowout leaderboard. For what other government offices spend on the small stuff, see the $1.6 million the Victorian Opposition says the Big Build spent on office pot plants. For what the ATO itself reveals about who pays tax, see the companies that paid no tax in 2024-25.

The ATO's Adelaide staff will work from 11 floors of a brand-new tower. Whether moving there saves taxpayers money depends on a rent figure that hasn't been made public. We'll update this story if the ATO answers our questions, or if the Auditor-General takes up the committee's request.

Top photo: Festival Tower Two under construction on King William Road, Adelaide, September 2026. Photo: Yu Chu Chin, CC BY-SA 4.0, via Wikimedia Commons.