The $85b Australians have saved by ditching the commute

The nation’s households saved more than $85 billion by skipping the commute and working from home, delivering an unexpected stimulus to parts of the economy while giving many Australians several hours a week more freedom.

In revelations that highlight the dangers facing governments and businesses that demand staff return to headquarters, new figures show households in Sydney and Melbourne are still not spending as much on public transport or running their vehicles as they did before the pandemic lockdowns of 2020 and 2021.

The nation’s households have saved more than $85 billion, and avoided hours trapped on congested roads and public transport, since COVID.Credit: Scott McNaughton

The financial windfall has either been banked or spent in other parts of the economy while the extra hours saved from driving or riding public transport have lifted the quality of life for many in the suburbs.

The Fair Work Commission starts hearings on Friday in a test case that could give clerical workers the right to work from home without being required to give a reason, and if successful could be applied to other awards, sending even more people back to the home office.

One of those to benefit from working from home was Sydney Northern Beaches resident Craig Costello, who estimated he saved about $350 a week by working from home during the pandemic, including $80 in parking, $50 in petrol and $20 in bridge tolls.

“More of the money went to the bank, and a lot of it probably went towards holidays,” he said. While the savings wound back when Costello started going back to the office three days a fortnight, he said he and his wife Sylvia were still spending a lot less.

Craig Costello said he and his wife Sylvia were able to save towards more holidays.

Costello, who was doing regulatory compliance work for some of the big four banks before semi-retiring recently, also saved nearly two hours of daily commuting.

“It gives you a bit of flexibility to do things during lunchtime like shopping or dropping off some dry cleaning,” he said, noting team meetings were also fewer and more productive. “The little things give back time at the end of the day.”

Before the pandemic, households across NSW spent $14 billion a year on transport services such as train, bus and ferry fares. But data contained within the June national accounts revealed this had collapsed to just $5 billion in 2020 and to $3.7 billion in 2021 as various pandemic-related restrictions meant public transport use plummeted.

Since then, spending has recovered only to $12.6 billion despite the state adding 370,000 residents.

The state’s households spent almost $20 billion in 2019 on operating their cars, with the largest single expense being petrol. In the just completed financial year, spending was still $3 billion lower.

Even accounting for extra spending on new vehicles, NSW households – predominantly in Sydney – have saved more than $39 billion since the pandemic as people drive less and work from home.

In Victoria, transport service spending collapsed from $10.2 billion in 2019 to just $1.6 billion in 2021. Over the past year, it has recovered but is still well short of its pre-pandemic level.

Victorian households’ spending on operating their cars peaked at $17 billion in 2019. In 2023-24, and despite the state being home to an extra 310,000 residents, spending on cars is at $15 billion.

The cumulative savings to Victorians amount to more than $34 billion.

Together, households in NSW, Queensland, Victoria and Western Australia have saved more than $85 billion on transport-related purchases and costs since COVID.

Public transport patronage figures show that before the pandemic, NSW residents took 30 million train trips. This fell to just 5 million during COVID but in June this year it was still only back to 25 million.

Victorian train patronage is also about 5 million trips a month down on its pre-COVID level. Similar falls have been recorded across the two states’ bus networks.

Before the pandemic, the long-running Household, Income and Labour Dynamics in Australia (HILDA) survey found the average Sydneysider spent almost six hours a week commuting between work and home. In Melbourne and Brisbane, the average commute was around 5.5 hours a week while in Perth it was almost five hours.

Independent economist Chris Richardson said the work-from-home phenomenon had delivered both financial and life benefits with the biggest winners low-income or part-time workers.

He said while businesses did benefit from having all their staff together, many people discovered during the pandemic how much time and money they spent commuting to work.

“There’s one thing that you can’t get any more of and that’s time. It’s hard to over-estimate just how important that is,” he said.

Morning rush hours have been less rushed since the pandemic.Credit: Kate Geraghty

Richardson cautioned NSW Premier Chris Minns, who last month ordered public servants to work “principally” from the office, that his plan would not be felt equally.

“Life is a series of trade-offs. There’s a little bit of over-optimism about trying to look after Sydney’s CBD against the benefit many people are enjoying by working from home,” he said.

Independent economist Nicki Hutley said the drop-off in spending on public transport could reflect price pressures keeping people from going out for recreational activities.

Population growth would probably bring the volume of spending on public transport back up towards pre-COVID levels, Hutley said, but there had been a fundamental shift in commuting habits.

“I do think flexible work is an ongoing change,” she said, noting it would be difficult for governments and big companies to compel workers back into the office full-time. “It’s been a positive thing for the majority of people to have that ability to work from home and save time and the money.”

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