There may be a housing shortage that is causing a crisis across the country, but in Victoria, Premier Jacinta Allan has no problem allowing civil servants to work from home (if they have one) rather than return to the office.
It’s a contrast to NSW, where Premier Chris Minns has just put the state’s bureaucracy back to work. Opinion is divided, but the Premier says he won’t change his mind.
Three years into the pandemic, Victoria has no plans to do the same. Instead, a spokesperson for Allan has called on all disgruntled NSW civil servants to move south to Victoria if they are unhappy about being called back to the office.
It is not a popular decision (at least not with the business community) by the Victorian Labor government, which has presided over the world’s longest and most restrictive Covid lockdowns. The state’s economy has been paralysed ever since.
It’s certainly not popular with CBD businesses still struggling, as many Victorians take advantage of the convenient work-from-home options.
The state is facing rising vacancy rates in city office buildings. Despite the housing crisis that is forcing many Australians into shared housing or, in some cases, no housing at all, office vacancy rates in Melbourne’s CBD continue to climb. They now sit at 18 per cent – that’s almost one in five offices sitting empty and unused.
These are the highest vacancy rates in the country, and have been for some time. The fact that Melbourne’s office vacancy rate is getting worse is further hampering the state’s already weak economy. It comes at a time when government debt is high and rising.
Businesses in Melbourne’s CBD are calling on the Victorian government to copy the NSW policy change rather than use it to attract more WFH bureaucrats further north, using it as a form of populism among workers who are comfortable not getting dressed and commuting to the office in the morning.
Victorian Premier Jacinta Allan says she will not change her stance on civil servants and their WFH arrangements
Melbourne is struggling with rising office vacancy rates in the city
As the US stock market crashed overnight on recession fears, global markets also reeled, spreading fear across the globe.
On the one hand, 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 more bad news for retail businesses that rely on consumer spending. If a recession looms, people will tighten their spending belts, which will only exacerbate the problems of inner-city businesses that are already suffering from reduced sales and business as so many people in Melbourne work from home.
The state public service is the largest employer in Victoria. Current policies allow bureaucrats to split their working hours between home and office, with no evidence that office time is even enforced.
Businesses argue that working from home undermines national efforts to boost productivity, but advocates argue that the flexibility promotes work-life balance and also encourages greater labor force participation. They also see it as an important step in encouraging more women to return to work after starting families.
Whether you support or oppose WFH provisions often depends on the generation you belong to. Younger workers are more likely to be in favor of such flexibility, especially now that it has become so widespread during the pandemic. Older workers are less supportive.
While private organisations can shape their working arrangements as they see fit in the interests of their business (with varying results across sectors), it can be argued that the state as an employer has different responsibilities.
On the one hand, it should be a model employer, supporting greater flexibility in its workforce. However, state bureaucracies also suffer from poor productivity, and governments arguably have a duty to structure their workforces in a way that supports other businesses in the community. That could include return-to-work provisions that help struggling retail, and landlords that combat high office vacancy rates.
These matters have clearly become priorities for the New South Wales Government, but not for the Victorian Government.
If a state like Victoria doesn’t need more time to improve public services as the pandemic recedes, it should at least improve government approval processes so office landlords can convert their unused spaces into more housing.
A greater number of inner-city units could help address the housing crisis, including lower rents as a result of more homes coming onto the market. At the same time, it could be another way to reduce office vacancy rates, which are hurting the economy.
It would also mean inner-city residents could work from home but still frequent shops in and around Melbourne, which are struggling with low footfall.