Is it too expensive to travel to work?

Public transport cost increases, paired with the cost-of-living crisis, are raising the cost of travel. Has the daily commute to work become too much of a financial burden for Aussie workers?

Australia’s ever-present and constantly rising cost of living is squeezing house budgets. Paired with high fuel prices and public transport costs, many Aussie workers are faced with the reality that the costly expense of travelling to work may no longer be a sustainable endeavour.

The Real Australian Commute Report showed that the average daily cost for an Aussie to get to their workplace and then back home is $20, totalling $5,020 per year. The national expense of this is around $43 billion a year, and painfully, that cost of public transport is also increasing, as Opal fares rose by 3.7 per cent in October 2023.

It creates an uncomfortable decision for workers, who already are trying to find ways in their financial budget to cut costs reeling from the damaging affects of the cost-of-living crisis and inflation.

Associate Professor Evgenia Dechter from the UNSW Business School stated that the complex relationship between commuting costs and salaries must be considered when looking for insight into this issue. For example, personal preferences and time constraints play a big role.

“Individuals make choices based on their preferences, budgets and time constraints. Subject to constraints, some prioritise shorter commutes by living closer to work hubs, even if it means higher housing costs and lower-quality housing. Others prioritise better living arrangements and may accept longer commutes,” Dechter said.

The growing economic pressures that were previously mentioned can be pinpointed as the key reason for this burden being placed on the shoulders of Aussie workers.

“For many households, the current economic conditions imply tighter budget constraints, putting immense pressure on workers, which may, in turn, affect their commuting and employment choices,” Dechter said.

“Traditionally, commuting costs haven’t been directly factored into salaries, but some employers are starting to explore ways to compensate for them. Employers offering remote work options are a positive development in mitigating commuting costs.”

If there was ever the need for another argument for why remote or hybrid work arrangements are a positive situation for employees, then cutting commuting costs would be a good one. With employers offering those arrangements to employees, it allows them to save that money and even redistribute it to more pressing matters, which there is an abundance of in this economic climate.

“Remote, hybrid and flexible work arrangements may not only alleviate the financial burden on employees but also potentially broaden the talent pool for firms struggling to find workers,” said Dechter.

Dr Andrew Dhaenens, an expert in workplace relationships from UNSW Business School, echoed this sentiment, stating that working from home and with more flexible hours is increasingly becoming more attractive.

“For those with longer commutes and caregiving responsibilities, working from home offers a significant financial benefit. There’s also a perception among employers that remote workers are more productive, further incentivising flexible work models,” Dhaenens said.

“Employees save on commuting costs, lunches out, and public transport fares, but they also gain time back from their commute to spend more time with friends and family. Additionally, we know that work/life balance is key to employee wellbeing and productivity.”

It’s something that most employers are taking on board, for a multitude of reasons. The Hybrid and Flexible Working Practices in Australian Workplaces in 2023 report showed that almost half of the employers said they have a minimum requirement for full-time employees to be at the workplace between three and five days a week.

Public transport costs are yet another reinforcement of the benefits of hybrid models. If employers want to enforce back-to-work mandates, Dhaenens believes that organisations may be in for a rude awakening, given the negative impacts it can have on their employees.

“Both employers and workers are still adjusting to remote work, and new management strategies will emerge to ensure effective collaboration and communication, but an additional day in the office often comes at a direct cost to employees,” Dhaenens concluded.