Australian bosses blame working from home for low productivity and fuelling recession fears
Bosses from several of Australia's biggest businesses have warned the country is headed to recession and have pointed the finger at one group of Aussies to blame. Staff members who continue to work from home have been singled out as one of the main reasons Australia could be headed toward a financial crisis. A Nine Network survey found several top business figures feared the habit was driving down productivity which was leading to lower economic growth. Telstra chairman John Mullen accused those working from home of abusing the privilege. 'It is contestable, but I wonder if the very recent declines have not been exacerbated by the working from home trend since the start of the pandemic,' Mr Mullen told . 'Anecdotally, many people are definitely working harder than ever and being more productive, but I don't think this goes for everyone.' The Productivity Commission released its Advancing Prosperity report in March revealing that productivity growth slumped to a six-decade low. The 1018-page report made 71 recommendations on how to improve it including a new visa system that would bring in more low-paid care workers from overseas. Treasurer Jim Chalmers warned at the time if productivity did not pick up then working weeks would become five per cent longer and incomes 40 per cent lower in 2063. Sydney Hydro director Tony Shepherd said productivity had been poor for the decade leading up to Covid hitting Australia in early 2020. 'During the pandemic, working from home, absenteeism, disruption of supply chains all had a negative impact on productivity and continue to do so,' he said. Mr Shepherd also hit out at the Albanese government's industrial relations changes, which have been bitterly criticised by business. 'The changes to our labour laws are misguided and will reduce productivity and add cost and stress to an already struggling economy,' he said. The industrial relations changes were aimed at closing the gender pay gap, expanding multi-employer bargaining and bringing in flexible rostering rights. Mr Shepherd backed the Reserve Bank's rapid sequence of 12 interest rate hikes saying they were needed to fight inflation, because the alternative was stagflation where both unemployment and prices keep rising. Echoing the words of former Labor Prime Minister Paul Keating, who oversaw Australia's last serious economic downturn in 1991, Mr Shepherd said the looming recession might be one the nation 'has to have'. He ominously forecast the 'resources sector won't save us' this time and backed the Reserve Bank's rapid sequence of 12 interest rate hikes to slow the economy warning the alternative would be stagflation, which is both rising joblessness and inflation. A technical recession is defined as defined as two quarters of the economy contracting as measured by GDP. Canstar finance expert Steve Mickenbecker told Daily Mail Australia that he wasn't as pessimistic about Australia's economic future and rated the chances of recession as being 50:50 with overseas factors set to have a big influence. 'There is still a level of buoyancy,' he said about Australia's economy. 'Jobs growth is up for May and this is after 13 months of rate increases.' However, Mr Mickenbecker echoed the bosses' concern over low productivity. 'The stats show productivity has not grown in Australia in recent years, if at all,' he said. 'If wages go up and productivity does not go up they may be a response to higher prices but at the end of the day they contribute to those higher prices. 'There's just no question about it, productivity has to rise. If you are going to expect higher wages and higher salaries at the end of the day it becomes inflationary without increased productivity. 'That's where we are at now. Higher wages are adding to inflation.' Mr Mickenbecker agreed that staff working from home was probably not helping productivity. 'It's a more challenging landscape for employers to manage input,' he said. 'The issue is working from home is that the collaboration starts breaking down a little bit. 'There's not somebody right at the next desk that you can 'say how do you do this or what about we try this you don't get those conversations very regularly. 'Those elements of creativity and spontaneity in the workplace start falling down and so does a bit of the culture and the team kind of feel.' On Wednesday He claimed artificially inflated housing markets resembled a 'Ponzi scheme' and was the 'bubble of all bubbles'. Mr Barrie compared the current economic climate in Australia to the Global Financial Crisis that was caused by the collapse of the housing market in America in 2008. 'It's exactly the global financial crisis which we saw in America, happening here in Australia today,' he told Australian online broadcaster ADH TV. Mr Barrie, who rose to national fame for opposing the Sydney lock-out laws in 2016, said every Australian realises 'something is terribly wrong in this country' as mortgages, bills and the cost of living skyrocket. He said Australian workers are forced to take on massive mortgages due to extraordinary housing prices, which are being pushed ever higher by importing more and more people to sustain rising demand. 'The only reason why house prices are going up is because we're bringing more people into the country,' he added. 'We have 620,000 students brought into this country, and everybody knows they're not students but a low-cost workforce that's been brought in to prop up GDP and work in 7-11 or drive an Uber. 'Really it's late-stage desperation in a Ponzi scheme. The housing market going up for 60 years relentlessly has led to a Ponzi out of all proportions - its the housing bubble of all bubbles.' A Ponzi scheme takes the money of new investors to prop up illusory profits, dividends and valuations that dry up as soon as the cash inflow stops. Mr Mickenbecker did not entirely agree with this analysis. 'I wouldn't call the property market long-term a Ponzi scheme,' he said. However, he admitted the property market during the Covid period appeared unsustainable. 'The take-off in prices prior to the Reserve Bank starting this cycle of increasing rates certainly had elements of that in it,' he said. 'Prior to the Reserve Bank moving it was irrational 'must jump in' that fed by an irrational desire to buy a property at a higher price.' However, he thought the demand from immigration and other visitors to Australia along with low supply meant the market was a firm basis. 'I look at long-term property in Australia and think there are sustainable reasons for property going up,' he said. 'There is a proper foundation for real demand in property so I expect prices to go up again. The current prices and recover are really just a function of low supply.'