City businesses face ‘financial ruin’ unless workers return to CBD, government warned

The Perrottet government has been warned city businesses face “financial ruin” unless it orders public servants back to the office and offers new incentives to attract workers back to the CBD – especially on Mondays and Fridays.

With COVID-19 cases subsiding and spring in the air, a range of business groups, politicians and stakeholders have called on the government to exhume plans it abandoned earlier this year in the face of Omicron and floods.

Russell James attends to the locks of a client in his Sydney CBD salon.Credit: James Alcock

CBD hairdresser Russell James said he was still trading 50 per cent down on pre-COVID figures as people were reluctant to come back to the city, using spurious excuses such as bad weather to stay home.

“It’s just people being lazy,” he said. “There has got to be a push for people to get back into their offices, to be reminded that this was only ever a temporary measure. Stop pussy footing around.”

Business Sydney said it was disappointing the government had shelved its “Thank God It’s Friday” lunch vouchers – announced with fanfare in June 2021, days before the onset of the Delta wave, to encourage people back into the CBD on the final working day of the week.

It said the vouchers should be brought back for spring, and the government should consider free public transport on Fridays for six months.

“You can see there aren’t a lot of people in the city on Monday and Friday,” said Business Sydney executive director Paul Nicolaou. “We now want the government to do the heavy lifting so that employees who work for the government come back on a more regular basis.”

The lobby group and independent MP for Sydney Alex Greenwich agreed public servants should be working in the office at least three days a week. Foot traffic was still a problem on either side of the weekend, they said.

Greenwich said the government lacked a “strategic approach” to ensuring people return to the CBD for work and play. “We really need a strong focus on supporting smaller businesses and a real focus on Monday to Friday. A critical part of that is ensuring people are back in the office,” he said.

“There seems to be a pathway for property developers to make a lot of money in new development – at Central Barangaroo, Central Station or Blackwattle Bay – but we’ve got the hairdressers and the coffee shops struggling every day.”

Greenwich wrote to the then small business minister Eleni Petinos in late July warning CBD small businesses faced “financial ruin” if things didn’t change.

Cities Minister Rob Stokes said the pandemic wrought profound change on the city and “we can’t assume we’re going back to the way things were before”. He said the government committed billions to activating spaces across Greater City, including a new package for businesses to improve outdoor dining areas, and there would be “more to announce soon”.

A spokesperson for the Department of Premier and Cabinet said the NSW public sector had been returning to the office safely at their employer’s discretion since work-from-home mandates were lifted.

The Property Council’s latest survey found the Sydney CBD office occupancy rate slipped to 52 per cent in July, a fraction lower than in preceding months, and much lower than the 67 per cent in June 2021 pre-Delta. Melbourne’s was 38 per cent and Brisbane 53 per cent.

Google mobility data showed movement in the City of Sydney is running at between 15 and 20 per cent below baseline levels for retail and recreation, workplaces, public transport and supermarkets.

The $25 Friday vouchers – which could be pooled on the same bill up to $100 – were supposed to encourage people to have a long lunch in the CBD on a Friday but last month Customer Service Minister Victor Dominello confirmed they had been “paused”.

Greenwich also wants the vouchers resuscitated but said they should be broadened to cover more businesses and activities, “not just long lunches, as important as they are for our city”.

Sydney Lord Mayor Clover Moore, who supported bringing workers back to the city three days a week in February, said the biggest hurdle at present was the public transport crisis and the state government needed to fix it urgently.

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