News from the Front Desk, Issue 496:When the NSW planning minister periodically taps an agency chief on the shoulder to share what the new priorities for their work should be, it’s something to be responded to, with alacrity.
For Greater Sydney Commission boss Geoffrey Roberts, that tap came recently in the wake of the Coronavirus hit that’s sent its tentacles into the most nether regions of our economy, not to mention our way of thinking and being.
Last time the minister fast-forwarded action it was for the Aerotropolis in Western Sydney.
For years the people of Sydney, and their economic leaders in particular, agitated for a better airport deal. One without curfew, one that was not so congested.
Eventually they got their wish at Badgerys Creek and today according to Roberts, it’s going gangbusters: 18 major corporate heavyweights declaring it home in some form or other, including CSIRO. That’s not a bad coup, he told The Fifth Estate on Thursday.
Never mind that people are starting to doubt the grand plan to put 1.3 million people in Sydney’s west, where it’s already reaching 50 degrees in summer. Or that others are openly questioning if, with the prolonged interruption to flights, we need another airport anytime soon.
- See this recent article on how the NSW government land development agency Landcom wants to “cool the commons”
This time though the minister Rob Stokes wants to fast track Tech Central precinct near Central Station where Atlassian has already announced it will build a high tech sustainable new headquarters, plus the Westmead precinct near Parramatta, along with Meadowbank and the Macquarie Park Innovation precinct.
Tech Central will naturally focus on the technology, given it’s already attracted Atlassian.
Westmead will spotlight med tech and that’s not a bad call given this is already a globally recognised hotspot of innovation.
It’s all about jobs, Roberts says. But not necessarily the kind of jobs you get in a 40-storey high rise office building. It’s about the potential for the rise of the manufacturing side of the med tech business.
Westmead, he says, already has a big advantage. “There is classy research going on there.
“We’re trying to change the way we do things. We know we’re famous for inventing things but not as well known for converting them to manufacturing.
“That’s where you get the job agglomerations.”
And how do you do it? By bringing together the “holy trinity of planning” – land use planning, infrastructure planning and investment.
It about creating an eco system, Roberts says.
Terry Rawnsley, national leader for economic and social analysis at SGS Economics and Planning, who’s become a regular in mainstream media, thinks it’s not a bad call.
Given the new focus on health, it makes sense; this is a growth industry, he tells The Fifth Estate.
But what does Rawnsley make of the Tech Central precinct?
That’s more problematic. A big problem will be demand for office space to fill this new high tech precinct that’s supposed to draw all the big household names that dominate our daily online life.
Some big corporates are starting to order their staff back to work at the office, whether they want to or not, but even so Rawnsley expects it will be a slow-motion return to the CBD we knew pre-Covid.
There’s likely to be quite a bit of sub lease space come onto the market, at attractive prices, he points out.
“That’s a precinct that looks a bit more wobbly than it did before Covid. Companies are just pausing in terms of their investment. Of the [four] precincts that’s probably the most uncertain.”
The Fifth Estate hears that many people are simply refusing to go back to the office.
That’s not something GSC’s Geoff Roberts is happy to let slide.
“I don’t accept that people don’t want to go back to the office,” he says. But even so, that may not be the critical thing.
He’s sitting on a report due out in coming weeks on the future of work that will show there are significant changes under way.
Details aren’t available yet but the term “digital divide” might just be about to take over from the “Red Rooster line” to define “pockets of disadvantage” that are “all over Sydney”.
We need to be thinking about the jobs of the future in a Sydney that’s poly centric, he says. And yes, a bigger part of that will be manufacturing.
People in manufacturing, laboratories and high tech spaces may have very different motivations and behaviours, Roberts says.
The appointments of two new commissioners reflects the new focus, he says. New economic commissioner is Jackie Taranto who “spent a lifetime building ecologies of innovation districts” including in Germany and is among other things a board member of Advanced Robotics Manufacturing. And Emma Herd replacing Rod Simpson who has completed his two terms as environment commissioner.
Interesting that Herd’s day job is chief executive of the Investor Group on Climate Change, so perhaps a signal that it’s indeed big investors that can most rapidly transform outcomes in sustainability and climate change, should they so desire.
The economist and futurist
What are people on the ground thinking and doing?
Some major companies, property owners in particular, are simply ordering people back to the office – perfectly understandable given their vested interest in the asset class facing the existential threat of 30 per cent or 40 per cent vacancies. For some staff members the move back is on a rotation basis, for others it’s a non-negotiable.
For many, though, the priority is to attract and retain talent, and that remains just as important post Covid as it does before. For some segments of the workforce that means the fun of being with other people remains a thing. For others it’s work-from-home that will keep them in the job.
Economist and future strategist Brian Haratsis at MacroPlan says his team of 24 was delighted to take up new digs in GPT’s Space co work premises – especially the younger members of his company.
Instead of an independent office elsewhere, they are now in “an office within an office” with free tea and coffee on tap. “The young people love it,” he said.
We didn’t ask if his company issued an order to return to work or whether the new space was enough to woo back the staff.
In Melbourne, activity continues unabated for some. In fact, enhanced.
This is the city where Lockdown V2 is killing the economic heartbeat of the nation – if you listen to the federal government and the media attacks on Premier Daniel Andrews.
(In fact, the attacks have become so relentless that you’d think John Kerr must surely be about to rise from his grave and relieve the premier of the heavy burden he carries. Meaning a lot of people will be surprised that according to a Roy Morgan Snap SMS survey just out, 70 per cent of people surveyed approves of the Victorian premier. )
Laminex, for instance, the building material supplier, has after decades in an office building in Melbourne’s Doncaster decided to shut its head office permanently and let its more than 150 staff work from home.
Mind it still has manufacturing premises at Cheltenham and a warehouse at Tullamarine with some offices and meeting spaces that it reckons work perfectly well for team meetings and so on. And there’s also membership of a national co-working outfit in the wings.
Sacha Leagh-Murray, general manager sales and marketing for the company, says the move was a Covid induced acceleration of the company’s new “work anywhere” program, that its innovative head of human resources was trying to implement. Not “work from home”, but “work anywhere”.
She says it’s been a boon in finding and attracting the more creative staff members who tend to live in the inner north and inner west of Melbourne and struggled to get to Doncaster, which is about 19 kilometres east of Melbourne.
Leagh-Murray too, likes the new system. She was previously travelling two hours a day and with hungry kids when she got home at 7pm, spending way too much money on Uber Eats, not to mention the cost of the travel itself, work related dinners and lunches out, and clothing. The savings are more than welcome, she says.
Rent wise it’s also a massive saving for the company – around $1 million a year when on-costs such as desks and cleaning are taken into account.
The company has also been able to retain a staff member who moved back to the Gold Coast and hire another one who lives in Healesville (50 km north-east of Melbourne) and who they’ve not met in person.
It’s meant way more use of the telecommunications equipment that was always there, but rarely used, Leagh-Murray, says.
The sustainable standards provider
But what if many more companies did that … what would be the outcome?
According to David Baggs of Global GreenTag International his company is already working remotely thanks to its global expansion in places such China, South East Asia and Malaysia.
Baggs, who speaks regularly to a big range of product and services providers in the sustainability space, says with Covid “the world took a deep breath and now we’re slowly getting used to the fact. Life won’t collapse in a heap and people are judiciously opening up their business again and realising they have to move forward.”
His business, which certifies and verifies sustainable products and recently launched a tool to manage reporting for modern slavery, hasn’t suffered too much at all, he says. In fact, this is usually a quiet time of the year, but the company has just had a record August.
The flooring sector in particular is going gangbusters.
That, and cleaning products.
The increased activity is coming from the residential sector, with people renovating, and from health related premises.
“Most people we’re speaking to are working from home.” And they’re happy about it, he adds.
Those most influenced are Millennials. “They’ve realised there is another life possibility. They’re getting a quarter of their daytime hours back.” Most people in his team are young and they’re asking if they really have to come back to the office.
Not really, Baggs tells them. As long as they’re happy and the ergonomics stack up. There are regular team meetings and “it’s working very efficiently.”
What about the creative spark that comes from social or work interactions?
If the team needs to brainstorm on new standards – what’s reasonable and what’s achievable – then they’ll meet. But generally, the nature of the work is technical so the office presence is not essential.
SGS’s Terry Rawnsley says CBD offices after Covid will probably look different than in the past, but they won’t disappear.
“The death of the CBDs might be slightly exaggerated in my view,” Rawnsley says.
You need to keep in mind that not everyone likes to work from home, he says, nor is it convenient for those perhaps with small children or who are not established enough to have the luxury of a spare room in the house to use as an office.
Rawnsley himself has two five-year-olds so he feels the pinch.
Those who find it harder to manage to work from home include new starters, he says.
“Culture is what it is on a day to day basis.” There are incidental meetings that can be important.
“If I saw a grad in an office staring at spread sheet for four hours at a time, I’d go and ask if they are okay.”
More people are starting to demand workers return, and Rawnsley sees that occupancies are slowing growing and train patronage is starting to creep back up. Not in his hometown of Melbourne, of course, where the city is still “dead as a dodo”.
Perth and Brisbane are more advanced in terms of return to work.
There are noises of people upping sticks for regional areas but there’s a limit to how far that will go, thanks to the lack of capacity to significantly expand housing stock to meet expanding demand, Rawnsley says.
Hobart is a perfect example. Before its recent boom new arrivals were 500 to 1000 people a year. During the boom it was 1500 a year.
“It was a very small uptick but that exploded the property market,” Rawnsley said. The reason is that Hobart, along with other attractive regional towns and cities, simply don’t have the capacity to add to housing stock in a hurry. And, as in Hobart, that can push up selling prices and rents, making things most uncomfortable for locals.
On the economy in general, are fundamental shifts under way?
There’s certainly been a spanner in the works, Rawnsley says.
For example, international education won’t come back in a major way for a few years. And the immigrants that typically settled in Melbourne and Sydney – around 100,000 in each city before Covid, stimulating local economies – has pretty much disappeared.
Like the recession in the 90s it will take us three or four years to work out what we’re good at.
“In the 80s Australia was still making cars, socks and jocks and refrigerators and that disappeared in the 90s and it took the economy a little while to work out what it was good at.”
Professional services and education filled the gap.
“After Covid we will work out what we are really good at. Health and manufacturing will play a part.”
“Any recession takes two to three years at least for the economy to right itself.
“This is a little different” but it will still take that time.
Among the longer term shifts is the move to renewable energy and more sustainable, efficient homes.
Covid will only accelerate those trends, he says.
Brian Haratsis thinks repair will take longer but it will be worth waiting for.
He says working patterns will change and 30 per cent of office workers won’t go back, at least full time.
That could be problematic, especially for young people who have to be educated and trained.
In forecasting he’s done recently for the National Housing Finance and Investment Corporation it’s emerged there would probably be about 40,000 fewer dwellings needed in 2021-22.
“That’s not particularly damaging”
Migration was already dropping before Covid hit. The forecast was 240,00 and it was down to 225,000 a year, he says.
But in four to five years those immigration numbers will re-emerge and create boom conditions again.
The numbers won’t accelerate sooner thanks to the optics; it’s seen as politically unpalatable to bring people into the country when unemployment is high. Ignoring, of course, that every immigrant creates perhaps 1.3 or 1.4 jobs.
This is why he thinks we will have three or four years of difficulty, but then Australia will boom.
Compared to other parts of the world such as Atlanta in the US where his sister lives with its massive coronavirus infections and huge death toll, Australia looks good, Haratsis says.
You’d have to say, very good.
That’s if we manage to keep it that way.