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COVID-19 killed the CBD

Matt Byrne

According to media reports, Australia’s peak business lobby groups are at loggerheads over how the government should be supporting workers through the COVID-19 pandemic, with the most recent articles providing colourful accounts of vitriol, walk-outs and slanging matches.

In amongst these fissions, one might have missed a debate that is emerging on another front – namely regarding the future of the CBD, office work and the very nature of cities as places for work, commerce, habitation and recreation. It’s vital that we understand what this debate entails for working people and begin planning our response, because it is likely to impact on our lives well beyond the course of this pandemic.

I received an interesting email recently, which initially alerted me to this emerging issue. The email in question was an invitation to attend online – for the discounted price of $675 – the 2020 AFR Property Summit, which will discuss the ramifications of COVID-19 on the commercial property sector and the shift of many office workers to working from home arrangements.

This event is the latest in a stream of media reports that provide us with an insight into the different sides being taken in this debate.

On one side of this debate, we have the commercial property sector who are fearful of the long-term impacts that work from home arrangements will have on their interests and are advocating the return to offices and shops as quickly as possible.

On the other side, we have corporations such as the big four accounting firms who are planning for these new working arrangements becoming permanent. Not only do their employees love it, but they can explore reducing their commercial property costs and shifting some of those costs onto workers – by expecting us to maintain home offices without proper resourcing or adhering to Occupational Health and Safety standards.

Commercial property owners and investors will have their assets fundamentally threatened should these new work arrangements become permanent. The Property Council of Australia has already seen office vacancies rise slightly in the six months to July, however, it is worth noting that the Property Council calculates vacancies “on whether a lease is in place for office space, not whether the tenant’s employees are occupying the space or working from home.” Looking at how offices are currently being occupied would give us a better sense of what is really going on.

A joint media release from the ACT Property Council, the ACT Master Builders Association, the Canberra Business Chamber and the ACT Hotels Association provides a clearer picture of the fears of commercial property owners and investors. According to the media release (dated 20 August) “just over 40% of (Canberra) offices are occupied at the moment”.

If these figures from Canberra are replicated in cities across Australia, then it is clear that a transformational process of reshaping the economic geography of our cities is underway. The question is, how do we as a society respond?

The remedy, according to the four horsemen of the commercial property class, is to get workers back into offices as soon as possible regardless of the benefits these new arrangements may have produced:

While employees may enjoy the flexibility of working from home, the reality is that these arrangements are a drag on the local economy and on struggling small businesses. Continuing a broad-brush working-from-home policy jeopardises the ability of the daytime hospitality industry to work at all.

This is a predictable response from those who have all their eggs invested in concentrating business activity in CBDs. However, they seem to be ignoring the growing movement within corporate Australia to plan for a future with permanent work from home arrangements.

In early May, KPMG released a report titled ‘Our New Reality: Predictions After COVID-19’. The report presents the thinking going on inside one of Australia’s largest corporate advisers as to what the world could look like after the pandemic.

The report asks fundamental questions regarding the economic geography of our cities and working lives, exploring issues as diverse as whether we’ll even want to live in cities, to questioning the ongoing viability of globalisation.

Key to this report are KPMG’s thoughts on the future of work and the future of the city, much of which stands in stark contrast to the views of commercial property owners and investors, for example, stating:

Working remotely during the coronavirus crisis has quickly become the new norm, and one that won’t dissipate quickly – rather, remote working (both part-time and full-time) will rise across all industries.

Whilst lacking in detail, we can begin to understand where KPMG see the world heading and how it will affect us. There is a heavy emphasis on the professional workforce who they picture being able to balance their work within a more flexible lifestyle. Other areas that might be amenable to working people are the possibility of opening up green spaces and housing options in repurposed CBDs as commercial activity is decentralised. Obviously some of this is worth engaging positively with, but not a lot of thinking appears to have been done on how affected industries will adapt to no longer having a CBD to concentrate commercial activity within and under the surface lurks the continued belief in outsourcing jobs and making them less secure through so-called ‘gig arrangements’. But in terms of the ongoing occupation of office space in CBDs, they believe that horse has bolted.

Out of this transformation we have to forge our own worker-led path, entrench the new flexibility gained by officer workers and extend the benefits from the reshaping of the economy to manual and service industry workers including growing secure jobs and improving conditions such as those affecting work/life balance. That’s why it is fundamental that we take a broad and creative approach to protecting workers from the recession and planning for a recovery.

Some of the ways that this can be achieved are addressed in the ACTU’s pre-budget submission which called for, amongst other policies, a National Reconstruction Investment plan, a Training for Reconstruction plan which includes free TAFE courses and a 50% Government wage subsidy for apprenticeships and free universal early childhood education. Beyond addressing the short term effects that such a change will have on our lives, we have to think outside of the scope of policies currently being defined by business and engage in the new world of possibilities and challenges that are opening up in terms of how we address not only work and productivity, but also alienation, care and freedom.

In conjunction with spending less time in the office, we could look at shortening the working week, which has been shown to improve the lives of working people in all manner of ways. We could look to administrations in Paris and Barcelona and reconceptualise the city itself so that buildings, amenities and transport infrastructure works for people instead of the other way around. We could move away from a finance driven investment model which sucks money out of communities and instead establish a community approach to wealth building like what has taken root in cities like Preston in the UK and Cleveland in the US. There’s no shortage of ideas for Labor branches across the country to explore.

The world that business wants to build after this pandemic is at best a profit-oriented adaptation or at worst a return to the past. The time for forging our own vision for what cities and communities look like after this pandemic is now.

Matt Byrne is the former Secretary of ACT Labor. Twitter


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