James Campbell: Victoria’s work from home culture emblematic of state’s decline

Victoria has gone from being a rich to a poor state. Ingraining a work from home culture won’t help us catch up to Australia’s top achieving states.

If Victoria was doing well compared to the rest of the country, you might understand Jacinta Allan’s call for the work-shy to head south.

But we’re not – we’re doing appallingly.

It’s easy to attribute Victoria’s current woes — the biggest debts and highest taxes — to the state’s disastrous handling of Covid.

But even before the world’s longest lockdowns belted the Victorian economy, the state was falling behind the rest of Australia.

High immigration has masked the fact that in the past two decades Victoria has gone from being a rich to a poor state.

Twenty years ago our GSP per head was above the national average. Today it’s below 90 per cent and falling.

If things were going well in Victoria, you might understand Jacinta Allan’s call on working from home. Picture: David Crosling

In the same period Victorians’ household disposable income has also fallen from the national average to around 8 per cent below – behind only South Australia and Tasmania.

The main reason we are getting relatively poorer is because of the abysmal output of Victorian workers.

In this period the state’s labour productivity – the amount we produce for each hour we work – has gone about 8 per cent below the national average to about 12 per cent below the national average – again with only Tasmania and South Australia behind us.

Permanently locking shirk-from-home for our bureaucrats is only going to see that gap between Victoria’s workforce of leaners and other states’ heavy-lifters widen.

That’s because the private sector is likely to be forced to mimic the offerings of the high-paying Victorian Government.

The NSW Government on Tuesday issued a memo to its public servants, urging them to get back into the office more often.

But the speed with which Jacinta Allan responded saying “any public servants from NSW who like flexibility in their workplace should consider moving to Victoria” suggests the premier hasn’t grasped the trouble we are in.

Businesses are being driven from the state by Treasurer Tim Pallas’ tax-a-thon. Picture: David Crosling

Tim Pallas’s business and property tax-a-thon is already driving business from the state, the idea that we would be trying to entice an Ugg boot army of three-day-a-weekers to come to Victoria is just plain weird.

In June it was reported Melbourne’s CBD is lagging behind the rest of the nation in its Covid recovery, with workers and weekday visitors at just 70 per cent of pre-pandemic levels – below Sydney, Brisbane, Adelaide and Perth.

Measures of foot traffic show the majority of the drop is explained by the government’s refusal to send workers back to the office.

Businesses have worked out workers work better at work.

But for some reason the Allan Government is happy for us to keep getting relatively poorer. Since the GFC NSW’s real gross state income per head has grown by 21 per cent while Victoria’s has grown by only 12 per cent – the worst in the Commonwealth.

If you want to understand why Victorian real estate prices are diverging from the rest of the country this is a good place to start.