Opinion
Another great Australian dream goes by the wayside
Victoria Devine
Money columnistA little under a century ago, economist John Maynard Keynes predicted that by the year 2030, technological advances would be so great that we would be working a mere three hours a day. The greatest struggle for people living in the 21st century, he believed, would be figuring out how to fill all the spare leisure time we would have.
While technological advances have certainly radically changed the workforce and improved productivity compared with 1930, we’re still a long, long way from enjoying the 15-hour working week Keynes predicted. And I don’t know about you, but wondering how to fill the hours of my day is sadly still very much a problem I can only dream of having.
Most of us would cherish an extra day for ourselves.Credit: Dionne Gain
In Australia, the standard full-time working week has been 38 hours across five days since 1983 (the 40-hour work week dates to 1947). But in recent years, largely spurred on by COVID-19, an increase in burnout rates and a number of global trials, the push to move to a four-day week – where we would work 30 hours across four days while still earning the same wage as a five day, 38 hour week – has been gaining traction.
Ahead of last week’s economic reform summit in Canberra, union leaders put this idea to the government, raising it with Treasurer Jim Chalmers and selling it as a measure that could actually boost productivity rates.
Australian Council of Trade Unions president Michele O’Neil said the four-day model, as well as other flexible working models that could include things like more annual leave or additional rostered days off, had been shown to “deliver improved productivity and allow working people to live happier, healthier and more balanced lives”. O’Neil also said “shorter working hours are good for both workers and employers”.
According to at least two studies, this is true. One peer-reviewed study tracked 141 organisations in Australia, New Zealand, Canada, Ireland and Britain that moved to a four-day week as part of a six-month trial and found that the 2896 employees who participated reported improved mental and physical health, a boost in job satisfaction and a reduction in burnout.
Another study from 2023 tracked 10 Australian companies that trialled a four-day week and found an increase in productivity in 70 per cent of the companies. In the remaining 30 per cent, productivity rates did not decline, but stayed the same as what they had been over a five-day week.
Polling from Resolve this week shows that 66 per cent of Australians are in favour of working four days for the same pay and workload as a five-day week, while just 13 per cent are against the idea. So it’s fair to say that, like me, lots of Australians have already written up a wish list of tasks around the home and new hobbies we could acquire if we suddenly found ourselves permanently enjoying a three-day weekend.
But for every positive study, there are examples of the four-day week not working. When major companies such as Bupa and Unilever began trialling a nine-day fortnight and four-day week respectively, both organisations abandoned them shortly into the experiment . Unilever called it “rigid” and Bupa said a “one-size fits all approach won’t suit our workforce going forward”.
It’s here that the much-debated topic of productivity enters the chat. As the Productivity Commission says, in a nutshell, productivity is the measure of how much output (things like goods and services) is created from a specific amount of input (materials, labour, capital, et cetera). An increase in productivity means a growth in output from the same or fewer inputs. Basically, it’s working smarter, not harder.
For a long time, though, Australians have been working harder (Productivity Commission figures show we are working longer hours), while our productivity rate has been crawling. In the March quarter, the commission found the public sector had increased its output by 1 per cent, but that it did so by working 2.4 per cent more hours, negating the increase, as well as the 0.5 per cent increase reported across the private sector.
As if that wasn’t bad enough, last Tuesday, Reserve Bank governor Michele Bullock said the central bank was downgrading its long-term productivity growth from 1 per cent to 0.7 per cent. And while those numbers might not seem like much on paper, in practice, they can have a very real and very negative impact on things like wage growth and quality of life.
Of course, this issue isn’t a new or short-term one. Since the Global Financial Crisis hit in 2008, productivity growth around the world has slowed. As such, it was always destined to be a topic of conversation at the government’s summit.
So why are the unions pushing for a reduction in working hours when we aren’t exactly nailing productivity? The short answer is that the root cause of our slow growth is not that workers are lazy or simply don’t understand how to get things done efficiently, but rather it’s the lack of long-term investment from businesses into people, processes, research and technology.
When asked about the proposal, Prime Minister Anthony Albanese all but poured cold water on it, saying “the ACTU, of course, is entitled to put forward whatever it likes”. He said: “But that doesn’t mean … that it’s government policy because someone put forward an idea.“
Other attendees at the roundtable spent the week declaring the blanket fix to our national productivity problem is artificial intelligence. And while AI no doubt has a role to play in the future of how we work, it’s worth remembering that just a couple of weeks ago, Chat-GPT5, which came with the promise of being like having a conversation with a “PhD level expert in anything”, thought the name of a former US president was Gearge Washingion. So it seems safe to say that it remains a fair way off being the solution to an extremely complex and wide-ranging problem. Which is kind of like the four-day week itself.
For many people and workplaces, it can clearly work effectively where productivity levels either stay the same or increase, while employees suddenly find themselves with a spare eight hours of leisure time. Most of us would absolutely cherish an extra day for ourselves. But for as long as productivity limps along and the government isn’t in favour of it, the four-day work week is set to be yet another great Australian dream that many of us can’t actually achieve.
Victoria Devine is an award-winning retired financial adviser, bestselling author and host of Australia’s No.1 finance podcast, She’s on the Money. She is also founder and director of Zella Money.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their personal circumstances before making any financial decisions.
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