Treasurer Jim Chalmers explains why Australians should continue to be able to work from home

Treasurer Jim Chalmers has said Australians should continue to have the right to work from home despite fears that skilled workers will dwindle and worsen inflation.

The man in charge of Australia’s housekeeping denied claims that being away from the office hurt workers’ productivity.

“A lot of people felt they were more productive at home,” he said on Wednesday.

dr Chalmers called for this after Reserve Bank of Australia Governor Philip Lowe warned that big wage increases without productivity gains would fuel inflation as companies would pass the cost on to customers.

“This continued service price inflation reflects strong demand for many services and strong wage growth against a backdrop of weak productivity growth,” said Dr. Lowe at a summit in Sydney on Wednesday.

Treasurer Jim Chalmers (pictured with his wife Laura) has said Australians should continue to have the right to work from home despite fears that skilled workers will dwindle and worsen inflation

But the Treasurer said Australia’s productivity growth was weak before the pandemic hit in 2020, when employees were allowed to work from home while cities went into lockdown.

“We face a productivity challenge in our economy that existed before work from home,” said Dr. Chalmers.

“This challenge has been evolving in our economy for some time, it will also take time to address and I’m sure there are more factors at play than just working from home.”

Speaking to the Morgan Stanley Summit in Sydney, Dr. Lowe that labor productivity is now the same as it was in 2019, before the first cases of Covid became known.

“Unfortunately, productivity growth has been weak lately,” he said.

dr Chalmers called for this after Reserve Bank of Australia Governor Philip Lowe (pictured) warned that big wage increases without productivity gains would fuel inflation as companies would pass the cost on to customers

“In fact, the level of output per hour worked in Australia today is the same as it was at the end of 2019. This means there has been no net productivity growth since then.”

Ross McEwan, chief executive of National Australia Bank, said last month that staff had to return to the office five days a week, prompting a hostile reaction from his staff.

His colleague at Commonwealth Bank, Matt Comyn, also ordered his 49,000 employees to return to the office a few days later, but on a more flexible basis that allowed them to spend 50 percent of their working hours at home.

The Reserve Bank expects wage growth to reach 4 percent by the end of 2023 for the first time in 14 years.

Treasurer said Australia’s productivity growth was weak before the pandemic hit in 2020, when employees were allowed to work from home while cities went into lockdown (stock image)

The surge will come as labor market productivity stagnated at just 1.44 percent.

The wide gap between wage increases and the amount of work being done could result in many companies raising prices to cover labor costs and maintain their margins.

Last week, the Fair Work Commission gave Australia’s 184,000 minimum-wage workers an 8.6 percent increase based on new job classifications, while another 2.5 million people on special wages received a 5.75 percent increase from July 1.

With inflation at 7 percent, there are concerns that company workers with individual and collective agreements will demand higher wages to deal with the cost-of-living crisis.