There might be a housing shortage that is causing a crisis right around the country, but in Victoria Premier Jacinta Allan is happy to let public servants continue to work from home (if they have one) rather than get back in the office.
It’s a contrast to NSW where Premier Chris Minns has just ordered the state’s bureaucracy back to work. It’s dividing opinion but the Premier says he’s not going to change his mind.
Three years on from the pandemic, Victoria has no plans to follow suit. Rather, a spokesperson for Allan has called for any disgruntled NSW public servants to make the move south to Victoria if they aren’t happy being called back into the office.
It’s not a popular decision (at least not with business) by the Victorian Labor government that presided over the longest and most restrictive Covid lockdowns anywhere in the world. The state’s economy has been crippled ever since.
It’s certainly not popular with CBD businesses that continue to struggle as many Victorians take advantage of comfortable work from home provisions.
The state has surging vacancy rates amongst city office buildings. Despite the housing crisis forcing many Australians into shared accommodation or sometimes no accommodation at all, CBD office vacancy rates in Melbourne continue to rise. They are now sitting at 18 per cent – that’s nearly one in every five offices vacant and unused.
They are the highest vacancy rates anywhere in the country, and have been that way for some time now. The fact office vacancies in Melbourne continues to get worse is further hampering an already weak state economy. It comes at a time when the state government’s debt is very large and on the rise.
Businesses in the Melbourne CBD are crying out for the Victorian government to copy the shift in policy happening in NSW rather than use it to try and attract more WFH bureaucrats from further north. Using it as some sort of attempt at populism amongst workers who enjoy not having to get dressed in the morning and travel into an office.
Victorian Premier Jacinta Allan says she won’t change her stance on public servants and their WFH arrangements
Melbourne has surging vacancy rates amongst city office buildings
With the sharemarket in the US crashing overnight on fears of a recession, global markets have also wobbled, spreading fears worldwide.
At one level it could be good news for homeowners struggling with high interest rates – rates may need to come down to stimulate economic activity if Australia’s per capita recession becomes a technical recession.
But it’s certainly further bad news for retail businesses reliant on consumer spending. If a recession looms large, people will tighten their spending belts, only adding to the difficulties of inner-city businesses already coping with smaller turnover and patronage because so many people in Melbourne are working from home.
The state’s public service is the largest employer in Victoria. The current policy allows bureaucrats to spread their working time between home and the office, with no evidence that spending any time in the office is even enforced.
Business insists that working from home thwarts national efforts to raise productivity, however advocates argue that the flexibility is good for work-life balance and also encourages more workforce participation. They also see it as an important move to encourage more women back into work after starting a family.
Whether you support or oppose WFH provisions often depends on which generation you are in. Younger workers are more likely to be in favour of such flexibility – especially in the wake of its prevalence during the pandemic. Older workers are less supportive.
While private organisations can structure their working arrangements however they choose to in the best interest of their businesses – with variable results across sectors – there is an argument that the state as an employer has other responsibilities.
On the one hand it should be a model employer, which would support more flexibility in the workforce.
However, state bureaucracies also suffer from poor productivity, and government’s arguably have a duty to structure their workforces in a way that supports other businesses within the community.
That can include return to work provisions that help the struggling retail sector, and landlords battling high office vacancies.
These have clearly become priorities for the NSW government but not the Victorian government.
If a state like Victoria isn’t going to require more time back in the office for its public service as the pandemic fades from view, it should at least improve government approval processes to allow office block landlords to convert their disused spaces into more housing stock.
A greater number of inner-city units could help address the housing crisis, including lowering rental prices as a result of more dwellings coming on the market. At the same time, it could provide another way to lower office vacancy rates hurting the economy.
It would also mean that inner-city residents could work from home but still frequent the retailers in and around the Melbourne city struggling with low customer numbers.
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