Melbourne Businesses Brace for Impact as WFH Proposal Sparks Fears of Economic Downturn
Melbourne’s hospitality sector is already struggling to recover from the prolonged COVID-19 lockdowns, and a new proposal to encourage working from home to ease the nation’s fuel crisis has sent shockwaves through the business community. Owners fear that a renewed push for remote work could deliver a devastating blow, pushing already fragile businesses to the brink of collapse.
Ily Yildrim, manager of Slate Bar Restaurant in Melbourne’s CBD, voiced the anxieties plaguing many business owners. “We’re still seeing the effects of COVID,” he stated. “Business has only gotten back to about 60 percent of pre-COVID levels.” The city endured one of the world’s longest lockdowns, with stringent stay-at-home orders and travel restrictions lasting a staggering 262 days. The economic fallout was immense, with estimates suggesting the state lost $100 million per day during this period.
The debate around working from home (WFH) was reignited following recommendations from the International Energy Agency (IEA) urging countries to implement fuel-saving measures. This comes as Australia grapples with a severe fuel crisis, with global supply pressures from the Middle East leading to widespread shortages. In New South Wales, 187 petrol stations have run out of diesel, while Victoria is facing similar issues with 83 stations affected. Fuel prices have skyrocketed, with some areas seeing prices surge above $3 per litre.
Energy Minister Chris Bowen acknowledged the IEA’s advice, suggesting that working from home is a “good idea” for Australians where feasible. However, for businesses like Slate Bar Restaurant, this proposal is far from a solution and instead presents a significant threat.
“Most CBD workers already take Monday and Friday off to have a long weekend, so we’ve already decided to close Mondays, and now Fridays are a bit hit and miss,” Mr Yildrim explained. “The proposed work from home idea to save petrol definitely won’t help. Rents aren’t going down, but we have lost a lot of customers. It’s literally killing the business. And now, on top of increased costs from suppliers due to rising petrol costs, we may have to deal with increased work from home measures. It’s getting to be impossible.”
The challenges faced by Slate Bar Restaurant are indicative of a wider struggle. Mr Yildrim revealed that the establishment has had to pivot its business strategy, relying almost exclusively on special functions and events to stay afloat. “Foot traffic is almost non-existent. If it wasn’t for events, we’d be done,” he admitted. “It’s a struggle. Our costs keep going up, but we have to keep our prices low to get customers in. We try to keep prices low, but we don’t know how much longer we can last.”
Mr Yildrim called for a more robust and permanent support plan from governments at all levels. “The government needs to help more. It’s always something temporary, but Victoria is the hardest state to do business in. We need permanent help,” he stressed. He proposed alternative solutions, suggesting that instead of mandating WFH, the government could consider subsidising public transport. “Maybe instead of telling people to stay home to save petrol, they could give free public transport instead, at least give free Myki three or four days a week. Try something to help business.”
Fuel Security Concerns Escalate Amidst Middle East Tensions
Energy Minister Chris Bowen reiterated that working from home is a sensible option where possible, highlighting its integration into modern Australian working life. He acknowledged that remote work isn’t universally applicable but urged individuals to explore ways to minimise fuel consumption. “I think people would already be looking at their options to minimise their fuel use,” Mr Bowen told ABC’s Insiders. “At the moment, for other people, it’s a lot harder. So I don’t think a one-size-fits-all approach is necessary.”
Beyond WFH, the IEA has also suggested other fuel-saving measures, such as avoiding unnecessary travel and reducing driving speeds by 10 km/h, to mitigate the impact of oil shortages stemming from the conflict in the Middle East. Mr Bowen assured the public that Australia’s overall fuel supply remains robust, with petrol stocks at 38 days and diesel and jet fuel at 30 days. He noted that despite the release of strategic reserves, shipments continue to arrive steadily, and both Australian refineries are operating at full capacity, exclusively serving the domestic market.
However, concerns about the nation’s fuel security are mounting. A leading Australian fuel security expert has warned that escalating tensions in the Middle East could severely disrupt vital fuel supplies within weeks. Dr Lurion De Mello, a senior lecturer in applied finance at Macquarie University, cautioned that the ongoing conflict could lead to further price hikes, potentially pushing diesel prices even higher than the current $3 per litre observed in major cities.
Dr De Mello explained that with the Strait of Hormuz facing effective closure due to soaring insurance costs and increased apprehension among tanker operators, fuel supplies could dwindle significantly by mid-April. “The Iranians are giving mixed messages, saying the Strait of Hormuz is not closed, but it’s mostly the insurers who are not providing coverage, so tankers are too scared to go through it,” he stated. While some vessels have been permitted passage, threats against ships linked to Western nations or involved parties have created substantial uncertainty. A recent attack on a Thai ship has further amplified these risks.
Dr De Mello criticised the Australian government’s preparedness, suggesting they have been “asleep at the wheel” regarding fuel reserve security. “The penetration with electric vehicles is so small, and people haven’t realised that we need to have fuel, and this has been warned about,” he commented.
The immediate impact of the crisis is already being felt at the bowser, with premium diesel prices in Perth exceeding $3 per litre last week. Across the country, 91 octane unleaded petrol is selling for between $2.40 and $2.50 per litre, while diesel prices are rapidly approaching the $3.00 mark. Dr De Mello predicts further price increases, drawing parallels to the surge in fuel prices following the Russia-Ukraine invasion.
“I’m surprised it’s not even closer to $3 yet… it’ll definitely keep creeping up,” he said. He highlighted diesel as a particular concern, given its critical role in the nation’s infrastructure, powering trucks, farming equipment, fishing vessels, mining operations, and even backup generators for renewable energy systems. “It’s an industrial fuel,” Dr De Mello emphasised. “Seafood prices will go up, freight costs will rise – everything gets passed on.”
The expert also warned that panic buying and hoarding are exacerbating the situation. Independent fuel stations are reportedly running dry first, as major distributors prioritise their own networks. “Normally independents are cheaper, but now company-owned ones are holding back fuel,” Dr De Mello observed. “It’s flipped.”
