The jury is in: Australians are obsessed with work. According to the OECD, Australians work the longest hours in the developed world.

A recent study of the impact of overwork by the ACTU (Fifty Families) painted a picture of hassled families, working zombies and sex on the run - products of our contemporary workplace culture. Those who work long unpaid hours feel their contributions are frequently motivated by an over-commitment to the job, supervisory pressure, understaffing or a combination of these forces and often lead to exhaustion and diminished productivity.

Yet while many complain about the long hours, the growing numbers of 'job-poor' are crying out for more.

Workplace relations' reform is at the top of the Howard government's agenda. When it gains control of the Senate on 1 July, the government will fulfil its promise to reform what it regards as inflexible workplace legislation. However, in the pursuit of improved labour market 'flexibility,' not enough is being done to redistribute work from the job-rich to the job-poor.

Research conducted by The Australia Institute has shown that a majority of us are looking to spend more time with our families and friends, even if it means earning less. 52 percent of full-time employees indicated that they would be willing to forego a pay rise in order to purchase additional leave.

The trend towards downshifting demonstrates that labour market policy is not keeping up with changes in society. Downshifters balance their time between caring for their children and family, volunteering in the community and participating in paid work. Growth in the number of downshifters indicates that Australian attitudes are beginning to move away from a willingness to sacrifice family and community for the sake of the company.

On the other side of the divide, a job is no longer a guarantee of prosperity. While the official unemployment rate has tumbled to its lowest mark in twenty eight years, over one million working households are struggling below the poverty line. The trend towards part-time employment has left one in every six Australian workers scrambling for more hours to pay for their family's needs.

A more flexible approach to work could assist employment redistribution. The Australia Institute's research indicates that if the government supported overworked employees to act upon their preference for more leave, an additional 146 000 extra full-time positions would be created.

In 1998, the French government moved to reduce the standard working week to thirty five hours for most employees. This is just one example of transferring working hours from the job-rich to the job-poor. The policy created an additional 123 000 full-time jobs in its first year of operation alone.

For a materially rich society that sees individual wellbeing as separate from material success, a reduction in full-time working hours is a reasonable outcome. It is also an effective strategy for increasing the incomes of lower-paid Australians, without resorting to welfare payments.

Some such policies exist in Australia. Most government departments offer a 48-52 scheme. This allows workers to forgo four weeks salary and replace it with annual leave giving the worker eight weeks annual leave. The pay decrease is commonly spread out over an entire year to reduce the impact.

While available, whether the attitude of management and workforce actually support the scheme is questionable. Especially considering a Department of Family and Community Services Research Report that demonstrated men are very poor at accessing family-friendly work arrangements available to them though human resource policy.

There is also no evidence government's are using such policies to increase full-time positions. Such leave policy needs further engagement if it is going to support a transition between job-rich and job-poor workers – rather than just catering to those who already have far more choice.

The Howard government believes flexibility is the key. Their policy of flexibility, however, has been at the expense of secure, full-time employment. The extra Labour market 'flexibility' the Federal Government plans to introduce after 1 July will come at the expense of employees' existing rights, without addressing the labour market divide.

In the last three years, two out of every three jobs created pay less than $600 per week. This should indicate the need for a policy rethink.

Our obsession with the unemployment rate has deflected our attention from the needs of both the overworked and the underemployed.

The federal government must address the labour market divide if it is to improve Australia's workforce morale. Both the job-rich and job-poor are unable to satisfy their immediate needs in the present environment. While downshifters are starting to lead the way, a real realignment of the labour market will require the assistance of a government-supported re-distributive mechanism.

It is time to cap the weekly maximum number of working hours, or reduce the average full-time load. Australian employees must also be free to take their full amount of annual leave, with the option to purchase more.

The 'churn and burn' model of work imposes significant costs upon both employees and employers. Employers are only too aware of the expensive and time-consuming nature of continually finding and retraining new staff. Offering employees the flexibility to sacrifice pay for leave would help employers retain staff, and encourage greater productivity.

Life satisfaction is intrinsically linked to job satisfaction. Workers unhappy with too little or too much work struggle to find the motivation to make their time on the job productive.

With the Coalition's control of the Senate, there comes an opportunity to create real change in line with the changing needs of Australian society.

The jury is in. In the interests of both Australia's employees and employers, the federal government must now judge the best way to make the labour market more flexible.

*Donahoo is a Fellow at OzProspect and Tim Martyn is a research officer at Jesuit Social Services