URGENT UPDATE: Melbourne’s fragile economic recovery faces a new threat as the Victorian government plans to enshrine a legal right to work from home. Business groups are sounding alarms, claiming this move could derail revitalization efforts in the city’s Central Business District (CBD).
The office vacancy rate in Melbourne currently stands at a staggering 18%, the highest in Australia. However, a recent report from the Property Council indicates some stabilization with a slight decrease in empty offices since January. This new government policy, proposed by Premier Jacinta Allan, would grant all workers the right to work from home two days a week, raising concerns among property industry stakeholders.
In a statement released just hours ago, the national chief executive of the Property Council, Mike Zorbas, condemned the plan as a “stunt” aimed at distracting from the government’s growing debt crisis. “If only the Victorian premier spent half as much time cracking down on the actual criminals crawling all over Victorian government worksites,” Zorbas remarked.
The implications of this policy could be severe. Experts warn that mandating work-from-home arrangements might deter investment crucial for job creation and urban vibrancy. Cath Evans, chief executive of Property Council Victoria, expressed deep concerns: “Decisions about working arrangements should remain a matter between employers and their teams—not mandated by government.” The industry argues that such a shift would threaten the broader pipeline of private investment in the CBD.
Contrastingly, unions and worker advocacy groups have embraced the proposal. The Australian Council of Trade Unions supports the initiative, viewing it as a necessary right for employees to balance their work and personal lives. This sentiment echoes with the Finance Sector Union, which stated that without strong enterprise agreements, many workers lack any entitlement to flexibility.
Retail expert Zelman Ainsworth noted the recent drop in vacancy rates, attributing it to increased foot traffic in the CBD as people return for work and leisure. “If anything were to distract from driving more people into the city, it won’t contribute to the continued improvement we’re now benefiting from,” Ainsworth warned.
In defense of the work-from-home policy, Josh Rutman, head of capital markets at JLL, stated that a mandate would not directly dampen office leasing. He added, “If your peak day as a business is a Wednesday, and you need all the space you’ve taken out over the lease, then that won’t change on a Friday regardless of how many go into the office.”
Meanwhile, Melbourne’s Lord Mayor Nick Reece acknowledged the reality of flexible work arrangements but raised concerns about fairness. He emphasized the importance of having all workers, including police officers and nurses, present at their jobs every day. “Melbourne is at its best when it’s full of people,” he said.
In a notable divergence, Roger Cook, the Premier of Western Australia, has ruled out implementing similar work-from-home policies, citing different cultural attitudes shaped by the state’s unique COVID-19 experience.
As this situation develops, stakeholders from all sides will continue to voice their opinions. The Victorian government’s next steps could significantly shape Melbourne’s economic landscape in the coming months. Stay tuned for further updates on this critical issue.
