The Week in Politics: The ups and downs of working from home

Analysis - The government's crackdown on working from home has significant consequences for thousands of public servants, the still-awaited ferries solution is testing coalition cohesion and tax policy is in the news again.

The hollowing out of Wellington's CBD and the plight of its hospitality trade has been a tale of woe since the pandemic, so the government ordering public servants to get back in their offices was a big deal for the capital.

Public Service Minister Nicola Willis didn't exactly order them - she issued "revised guidance" which had to be immediately passed on to department chief executives by the public service commissioner.

They were: Working from home was not an entitlement and should be by agreement, it could not happen if performance was compromised, and agencies must regularly report to the commission on the number and nature of arrangements in place.

Willis and Prime Minister Christopher Luxon delivered the news at this week's post-Cabinet press conference, setting out a raft of reasons why leaving home and going to work in an office was a good thing. Among them were allowing face-to-face conversations, sharing skills and experience, relationship building, and newer employees learning from their more experienced colleagues.

Luxon emphasised the importance of productivity, and four times he and Willis underscored that working from home wasn't an entitlement.

Willis said it was for that reason she was loath to set limits on how many days a week someone could work from home, explaining that if she did, it would be taken as an entitlement.

Because data on working from home isn't centrally collected, she didn't know precisely how much of it was happening but she intended to find out, hence the order for regular reporting.

"I want to know what's going on," she said.

So while it's not an order, the effect is going to be the same. Department chief executives are going to crack down on it and there will be many, many more workers in Wellington's office buildings, on the streets and in the cafes, coffee shops and restaurants.

Stuff's Wellington newspaper The Post was all over it, reporting that public servants made up about a quarter of the capital's workforce.

It interviewed hospitality trade operators, including Greig Wilson, who owns several bars and restaurants. He said he had been "dancing around the living room celebrating" because right now it felt like Wellington was on its knees.

Even if everyone who returned to the CBD couldn't spend much, $20 per person over thousands of people added up, he said.

Wilson said he might be able to extend business hours and hire more staff.

"All we've done this year is cut costs and reduce staff, so this can only be good for the Wellington economy and good for New Zealand," he said.

Restaurant Association chief executive Marise Bidois said many businesses cited working from home as a key factor contributing to the downturn they were experiencing. Councillor Nicola Young told The Post she was delighted.

"This will bring life back to central Wellington."

Anyone living in Wellington could relate to what has happened because the reduction in the number of people on the streets, particularly on the main shopping street Lambton Quay, has been so noticeable.

"Some days it's like a ghost town," said Stuff's Thomas Manche.

After analysing the announcement and what chief executives might do in response, his conclusion was: "Working from home isn't over in the public sector. But it looks likely to drastically reduce."

The New Zealand Herald tried to get a grip on how extensive working from home was.

"Willis didn't have exact numbers on how many public servants are working from their lounges, spare bedrooms or garages but a Massey University survey at the end of 2023 suggested that over 40 percent of people are hybrid working (splitting their time between home and the office)," it said. "That was up 32 percent from the same time in 2022,"

It also reported a working paper by US researchers published last year suggested fully remote workers could be between 10 percent and 20 percent less productive than those who came to the workplace.

As the week went on, the other side of the situation started coming to light - the significant impact it was going to have on those affected by Willis' "revised guidance".

"The work from office directive is a bitter pill for people who've built their lives around flexible working," a Stuff headline said.

The report said people choosing to live on the furthest outskirts of the Wellington region such as Wairarapa could face a brutal awakening.

"Scores of Stuff readers who do work from home responded that they would face additional financial burdens in having to return to the office and many cited parking, petrol and public transport costs, as well as day care and after school care," the report said.

It said commuting from Masterton to Wellington and back took up three-and-a-half hours and currently cost $526.50 a month. That was cheaper than the estimated $700 in petrol if travelling by car.

Wellington IT worker Michelle Ferreira said working from home saved money and helped work-life balance. Each time she went into the city office from her home in Tawa she estimated it cost $40 a day.

"Twelve years ago an early bird car park was $10 for the whole day. Now the same place is up to $25," she said. "My salary didn't double in 12 years but the price of things have unfortunately, so I do work from home to save money."

There must be many others who would say the same thing about the financial cost of working in the city, and the advantages of working from home were highlighted by Wairarapa commuter AJ Johnson who said working from home days were awarded to his team for exceeding targets and maintaining productivity.

"If our performance stalls, we're back in the office five days," he said.

The scheme had resulted in high performance and more work for the business.

A public service worker referred to only as Ruth said she began working from home during the pandemic. When she returned, teams and offices had been moved around.

"It was noisy and chaotic with constant interruptions… I just couldn't concentrate," she said, and returning to working from home had made her more productive.

'Putting on the washing and baking'

Outside of Wellington there might not be much sympathy for the plight of people such as those interviewed, and there was certainly no sympathy from Herald columnist Heather du Plessis Allan.

"It started with the first Covid lockdown when everyone went home. But when most of us went back into the office, public servants didn't," she said.

"They stayed at home, putting on the washing and baking casseroles between Zoom meetings."

She said the impact on the Wellington economy had been massive.

"The number doing remote work are staggering. At every single government agency for which data is available online, more than half the staff have some flexible working arrangements," she said.

"The two worst offenders are the Ministry for the Environment (94 percent of staff on flexible work) and the Serious Fraud Office (95 percent)."

Du Plessis Allan said some Wellington bars had seen Friday after work drinks disappear completely.

"Others say they've moved to Thursday after work drinks. That's a hint, isn't it? Obviously a few public servants are treating Thursday like the end of the working week."

Dire straits

Differences between the coalition parties appear to be holding up a decision on replacing the Cook Strait ferries.

At the same press conference where the work from home crackdown was announced, Willis was asked why it was taking so long to choose between the options the government was offered by a ministerial advisory group.

Willis did not immediately answer questions about when Cabinet had received the advice, RNZ reported, but Luxon chipped in saying it was "a few months ago".

Questioned whether NZ First was holding things up because of Winston Peters' public campaign for rail-enabled ferries, Willis said it would be "wrong to characterise [Peters] as having expressed that as a bottom line".

She gave an assurance that there would be a decision by the end of the year.

Stuff's Tova O'Brien said the advice was received on 19 June - three months ago - and it appeared that all three of the coalition partners had differing views on the best solution.

"ACT has long advocated for privatisation and talked up a mixed ownership model for KiwiRail," she said.

"New Zealand First is all about rail-enabled ferries, National not so much, and the finance minister is poopoo-ing any suggestion that Winston Peters has made rail-enablement a bottom line.

"Asked by Stuff if New Zealand First was holding up the process Willis didn't say no, instead she replied 'we're continuing to take advice as ministers, ministers are all engaged in the process across the three parties in the coalition'."

O'Brien said when the solution was finally announced, it would say a lot about the power wielded by the parties behind closed doors.

"The future of our ailing ferries is THE major test of the government parties' strength and bargaining power outside of the long-negotiated coalition agreements."

The ferries ordered by the previous government and canned by the current one were to be bigger and rail-enabled. It was the cost of port infrastructure to handle them that caused most of the budget blow-out given as the reason for looking for an alternative.

Banking on capital gains tax

Tax policy reared up again this week when ANZ's chief executive, Antonia Watson, told RNZ "the time has arrived for a capital gains tax".

"Her intervention adds another voice in a now growing chorus of influential New Zealanders calling for a capital gains or wealth tax," the report said.

"Labour is yet again examining the idea after defeat at the polls last year, earlier this month Mainfreight co-founder and billionaire Bruce Plested told RNZ he backed a wealth tax if governments were good stewards of the extra revenue, and last week a study commissioned by Tax Justice Aotearoa found well-off New Zealanders are paying less tax than their peers in nine similar OECD nations."

Luxon laughed when he was asked about Watson's view.

"I love it that a CEO of a big bank from Australia wants to take more money off New Zealanders," he said. "You don't tax your way out of a recession. You grow your way out of a recession."

Guyon Espiner's full interview with Watson is available on RNZ's website, and there's an explanation of party attitudes headed 'Where political parties stand on the capital gains tax'.

Labour pains

Labour leader Chris Hipkins missed all of this because he was in Liverpool this week attending the British Labour Party's annual conference.

It was supposed to be a celebration of Labour's election victory, but it was a far from joyous event, according to BBC and CNN reports.

"Lawmakers and officials in Britain's new governing party have been trudging through a massive conference centre in Liverpool, northwest England, since Sunday in sodden suits, a rumbling River Mersey as their backdrop, for the group's first set-piece event as a governing party in 15 years," CNN said.

"But the gathering was dampened by more than the weather. A strong of negative stories… has clashed uncomfortably with a set of joyless political decisions aimed at stabilising Britain's strapped finances.

"It means Britain's new prime minister is already deeply unpopular with the public, according to a batch of unflattering polls that landed with a thump as Labour's conference began."

The BBC reported a poll showing Keir Starmer was the least popular prime minister since the 1990s, beaten only by Liz Truss who served for just 50 days.

"The mood of the conference was darkened by rows over donations and cuts to winter fuel payments to millions of pensioners," the report said.

Perhaps Hipkins got something positive out of it, or learned some lessons.

*Peter Wilson is a life member of Parliament's press gallery, 22 years as NZPA's political editor and seven as Parliamentary bureau chief for NZ Newswire.