The New South Wales government has mandated that all public sector workers return to their offices due to concerns about the negative impact of remote work on the economy, particularly in Sydney's Central Business District (CBD).

This directive, effective immediately, emphasizes the importance of in-person work and aims to address the economic downturn attributed to the lack of office workers.

Premier Chris Minns stated that physical presence is necessary for 'building and replenishing public institutions,' with a goal of having over 400,000 public sector workers physically present at their jobs.

A directive from the Premier’s Department clarified that remote work should not be considered unlimited, and public servants are expected to work primarily in their approved workplaces.

The memo stresses that this approach is intended to foster a united work environment and improve workplace culture and mentorship opportunities.

Analysts suggest that lobbying by the Daily Telegraph influenced the government's decision, despite some states continuing to embrace remote work.

While the decision has garnered support from business and real estate groups in Sydney, it has faced opposition from unions who may challenge the new policy.

The Public Service Association has expressed concerns about the lack of evidence for the change and warned of potential staffing challenges due to high vacancy rates in critical agencies.

Business Sydney's executive director noted that the return to office policy could benefit local businesses by increasing foot traffic.

Recent data indicates that vacancy rates in both CBD and non-CBD office spaces have shown positive demand for the first time since January 2023, with Sydney's CBD rate dropping from 12.2% to 11.6%.

This policy marks a reversal of ten years of federal government policies that promoted remote work, which were seen as beneficial for reducing emissions and traffic.