The Sydney CBD cannot be abandoned and employers should ensure it survives by bringing their office workers into the city at least three days a week – preferably on the same day – says the man tasked with boosting productivity across the state.
NSW Productivity Commissioner Peter Achterstraat said the five-day office working week was a thing of the past but city centres – including Parramatta and Chatswood, but the Sydney CBD in particular – remained essential to innovation and luring tourists with a thriving central destination.
NSW Productivity Commissioner Peter Achterstraat.Credit: Wolter Peeters
But he did not join the business lobby’s calls for government spending to revive the stagnant city centre. Instead, he said existing assets should be better used, such as extending outdoor dining, reactivating dead spaces for cultural events, and encouraging off-peak office hours for cheaper and less congested transport.
“If someone were to say to me, why do we want people back in the CBD, [I have] two answers,” Achterstraat told the Herald . One is innovative productivity, which he calls “water cooler capital”.
“During the breaks, people sit around, have a cup of water, a cup of tea and they talk to each other about ideas. That was not happening over [Microsoft] Teams and Zoom,” he said. “This is very important ... When people are doing things remotely, there’s just the status quo continuing and we’re not getting the leaps in innovation. It’s just continuation. What we need is growth.
“But secondly, we do rely heavily on international tourism. The people [who] come in from overseas, they need to have a vibrant city.”
While task-based productivity – the performance of discrete tasks such as writing letters or producing reports – initially improved with working from home during the pandemic, Achterstraat said innovation suffered.
So did young people who were entering the workforce but were not offered an understanding of the culture of their organisation. Anecdotally, Achterstraat said the workers most likely to head into the office now are people under 30 or over 55.
“The people in the middle tended not to come in as much ... So what we’ve concluded is that it’s better if people come into an office three days a week,” he said.
“I’m also a firm believer [that] it’s better if the whole team comes in on certain days.”
There is also a slippery slope from full-time remote work to outsourcing jobs offshore, the commissioner warned.
“We’ve got to be careful that we don’t outsource the work so much into the suburbs that people say it can be done elsewhere. If there’s too much remoteness, it can be done in Singapore instead of Strathfield,” he said.
The Property Council’s latest survey found the Sydney CBD office occupancy rate slipped to 52 per cent of its pre-COVID rate in July: a fraction lower than in preceding months, and much lower than the 67 per cent in June 2021 pre-Delta.
A range of business groups and stakeholders last week called on the government to order public servants back to the office and offer new incentives for workers, such as reactivating its “Thank God It’s Friday” lunch vouchers.
But Achterstraat said things were on the correct trajectory. “In an ideal world, you want things to happen straight away, but I’m a realist. As long as we’re heading in the right direction [and people are coming back],” he said.
“I think five days a week for the medium term is gone, but I certainly hope we can have a consistent three to four days a week.”
However, he said he was “not a big fan of hard and fast rules” to get there.
“I think we all need to continue to do things, but I’m more in [favour of] showing people the advantages rather than issuing edicts,” he said.
“I say to the young people, it’s to your advantage to come into the office three days a week because you pick up the culture, you hear what the boss says, you’re asked to do a couple of jobs ... I want people to see the benefits of coming in and then make their own decision.
“The firms that say you can work from home 100 per cent of the time are probably going to realise that’s a mistake, and I think they’ll head towards the situation where to be competitive, they know they need people in.”
Achterstraat, a former auditor-general, was appointed in 2018 by then-treasurer Dominic Perrottet to be the state’s first public service commissioner, tasked with advising the government on how to simplify business in NSW, cut red tape and lower the cost of living.
“My approach in all my productivity stuff is to try to come up with ways of doing things which won’t cost the taxpayer money. My theme is asset utilisation: we’ve got assets, let’s use them better,” he said.
Achterstraat is an advocate for advancing mutual recognition of skills across state borders, enabling the use of drones in farming, legalising e-scooters so that people’s “first and last mile” of travel to public transport is made easier, and boosting the wattage allowed for e-bikes so they can be used for more deliveries and trucks can be taken off the road.
That approach extends to the CBD, which has received millions in government revitalisation grants.
“Al fresco dining, I think, is a win-win for most people because we’re not creating any a new asset. We’re just using the footpath a bit better and that that’s creating a vibrancy, but it’s also creating more jobs,” he said.
Abandoned spaces in the city should also be given temporary uses, such as for arts or food events.
Achterstraat said he did not have a view on whether public transport to the city should be free, but he thinks people should be encouraged to travel off-peak through cheaper pricing or staggering work hours.
“[Trains and roads] were absolutely packed between 6.30am and 8.30am. Instead of building new train tracks and new roads and buying more buses, let’s get some of those people to come in off-peak,” he said.
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