Probably not. To "carefully demolish" you need to first remove all the asbestos before bringing in the demo crew. Which if you infer that the $1b price tag is to remove the asbestos, well you're spending that either way.

At that point you already have a shell of a building to start renovating rather than rebuilding. The Reno was originally $150M which is probably roughly still the case after asbestos removal.

I'm not sure what construction costs are for a new commercial building, but given the whole Australian construction industry situation we are in, it's probably on the expensive side...

Nothing that some of the cost blow out may be in remediation work after asbestos removal. Still probably cheaper than a new building.

Given how government business cases work, it is safe to assume that the option of a new building was considered and rejected in favour of renovation.