In a stunning display of listening to people who are yelling at you, the Albanese government has partially backtracked on a plan to sell off heritage-listed defence sites, confirming that four of them will remain in public hands. The sites - Sydney's Victoria Barracks, Melbourne's Victoria Barracks, Fort Queenscliff, and RAAF Base Point Cook in Victoria - will stay publicly owned and have their historic elements preserved for community use after defence personnel vacate them.

The four were among 67 sites flagged in an independent audit as underutilised, not fit for purpose, and expensive to maintain, and had been earmarked for sale to recoup $3bn in the federal budget. The plan drew fierce opposition from the campaign group Save Victoria Barracks Sydney, veterans, and high-profile politicians including former prime ministers John Howard and Paul Keating - a rare instance of Howard and Keating agreeing on something, presumably while checking the sky for flying pigs.

Ahead of an important cabinet budget meeting on Monday, the government confirmed the four sites would remain publicly owned. Prime Minister Anthony Albanese said Victoria Barracks Sydney held a "special place in our nation's history," while Defence Minister Richard Marles said the military needed to focus its spending on keeping people safe. "Given the strategic landscape we face, we cannot afford to be wasting money. We need to look at how we best use defence money for defence capability," Marles said. "By moving personnel off these sites, and working to open them up for the public we are ensuring that the history of Victoria Barracks is one that can be protected and returned to all Australians."

The government will work with the Australian War Memorial once the sites are free to transform them into public spaces telling the history of Australia's military. Sydney's Victoria Barracks was built between 1840 and 1848, originally occupied by the British army, and is also home to the city's oldest wine cellar - which, one assumes, will be a key attraction.

Shadow defence minister James Paterson said questions remain about whether the military should have a presence and capability in Melbourne and Sydney. "While this is a win for Australia's defence heritage, it is only the beginning. The Coalition will continue to fight to save other critical defence sites, including HMAS Penguin, Lancer Barracks, Irwin Barracks, and more," he said. NSW opposition leader Kellie Sloane called the site an "irreplaceable part of our military heritage that deserves to be protected for future generations," adding: "Our military heritage and defence capability must come before a short-term cash grab."

The multi-year audit, completed in 2023, was tasked with identifying surplus and costly property holdings, often costing millions to maintain, and found underutilised sites are "draining resources from higher priority needs" for defence. "Today's estate footprint comprises numerous legacy sites without a clear ongoing link to current or future capabilities. Urgent interventions are needed to correct the unsustainable trajectory that has resulted from decades of deferred decisions on contentious estate issues," it said.

The sales of the Sydney and Melbourne Victoria Barracks were expected to raise $1.3bn given their prime locations in the biggest capital cities. Up to $2.4bn was expected from the sale of 26 major metropolitan sites, saving about $3bn in upkeep and security costs over 10 years - including sites in Randwick, Sydney; Sandringham and St Kilda in Melbourne; Petrie Terrace in Brisbane; and Fremantle in Western Australia. The government hopes the sales will free up land for new housing developments with a long-term target of 6,000 new dwellings, and defence expects personnel will have vacated six sites by the end of the year.

The announcement comes as cabinet's expenditure review committee meets on Monday after the official interest rate was lifted to an 18-year high of 4.85% in a bid to combat persistent inflation. Treasurer Jim Chalmers said higher fuel prices due to the Middle East conflict were the "primary driver" of inflation rather than the government's budget - which is, of course, exactly what you'd expect him to say.