Jacinta Collins (Victoria, Australian Labor Party, Parliamentary Secretary for School Education and Workplace Relations) Share this | Hansard source

I wish to speak tonight about the important issue of equal pay for Australian women, which has recently been in the news—and, in a sense, has been somewhat misreported. Last Thursday the Gillard government lodged a submission with Fair Work Australia, which is deciding a landmark equal pay test case brought by the Australian Services Union on behalf of 153,000 workers in the social and community, or SAC, sector. Almost 90 per cent of those workers are female. It is important to acknowledge the valuable work they do, caring for some of the most vulnerable members of our community, such as people with disabilities, people affected by mental illness and families devastated by violence and abuse. The Gillard government values the important contribution of this sector and wants to improve economic outcomes for women and their families.

The Gillard government is serious about equal pay. That is why the government changed Australia’s equal pay laws to allow this important test case to happen. It would not have happened under Work Choices. Under the Fair Work Act, the government extended the concept of equal pay to include the right to equal pay for work of comparable value as well as equal value. Without the government making these key changes, the test case would not have been possible.

I am pleased that the latest ABS wages data shows that the weekly gender pay gap has declined to 16.9 per cent in August 2010 compared to 17.3 per cent in August 2009. It also shows the third consecutive quarterly reduction in the hourly gender pay gap to 12.1 per cent. While the figures are still unacceptable, the gender pay gap clearly has not ‘blown out’ under this government, as Senator Cash wrongly claimed last week. Senator Cash also incorrectly claimed in her media release today and in question time yesterday that the government promised to support the funding of any wage increases as a result of the equal pay case—yet to be determined by Fair Work Australia.

It is quite clear that Senator Cash has not read or does not understand the heads of agreement because, if she did, she would know that the government has reserved its position in respect of making a submission in relation to the appropriate quantum and funding arrangements of any pay increase. The heads of agreement does, however, commit the ASU to supporting a phased implementation of any significant increases that might be awarded. It is wrong for Senator Cash to characterise the intent of the submission differently.

May I also remind the Senate and Senator Cash and her colleagues that the opposition’s Work Choices was a disaster for working women and their families, removing the no disadvantage test for Australian workplace agreements and stripping away wages and conditions like penalty rates, overtime, redundancy pay and holiday leave. In fact, women working full-time on Australian workplace agreements, or AWAs, took home on average $95 per week less than their colleagues on collective agreements, which was why the equal pay gap was expanding rather than contracting further. As well as changing equal pay laws, the Fair Work Act has other measures to address equal pay, including new criteria to guide minimum wage increases, a new low-paid bargaining stream and new opportunities for collective bargaining.

As the Senate knows, the Gillard government will also introduce Australia’s first paid parental leave scheme from 1 January next year. It is disappointing that the opposition is playing politics with this, with its private member’s bill to remove the obligation on employers to pass on payments. Unlike the opposition, the government believes paid parental leave is a workplace entitlement—just like annual leave or sick leave—and, like other leave, should be paid through employers. It is important to assist women to maintain their connection with their employer whilst they are on paid parental leave. Almost all industry of any significance accepts this point. But, once again, the opposition is playing nuisance or playing wreckers—seeking to spoil a scheme that will make a real difference to Australian women and their families.

Returning to the equal pay test case, Fair Work Australia has a tough job. It must strike the right balance between ensuring community workers are not undervalued, maintaining a strong and productive not-for-profit sector and considering the impact of a significant wage increase on services and the economy. These are the key factors the government has brought to the attention of Fair Work Australia through its submission.

On 30 October last year, the then Minister for Employment and Workplace Relations, and now Prime Minister, Julia Gillard, signed a heads of agreement with the Australian Services Union, stating that the government would assist Fair Work Australia and the parties by presenting evidence and research on issues such as employee earnings and the economic and labour market features of the sector. The agreement with the Australian Services Union sought to ensure that employees in the Queensland social and community services sector did not lose the pay rises they were awarded by the Queensland Industrial Relations Commission when they transferred to the national system.

In the agreement, both the government and the Australian Services Union recognised that any resulting pay rises would have ‘significant financial implications for the Australian government and the states’, and the government pledged to work through the potential funding implications with state and territory governments. The ASU acknowledged that there would be ‘very significant budgetary impacts to state, territory and Commonwealth governments in the event of any significant increase’ to pay levels and, for that reason, agreed to a gradual phasing in of any such wage increase ‘that takes into account the capacity of the Commonwealth, state and territory governments to meet a significant cost increase in the current economic and budgetary environment’.

Given this ASU acknowledgement last year that the government would need to assess its ability to fund a significant wage increase in light of economic issues, it is somewhat odd that the union and others seem to be surprised at the government’s submission which simply restates that point. Consider some of the comments in the government’s submission, and I quote:

1. It is important that FWA ... note the implications that a considerable wage increase may have on SACS services and the broader economy in a way that is consistent with the object of the Fair Work Act to promote productivity and economic growth for Australia’s future economic prosperity.

2. The potential fiscal cost to the Commonwealth of a significant wage increase ... could be considerable, even taking into account a phased implementation. The Government’s fiscal strategy, which is aimed at ... returning the budget to surplus ... will influence the Government’s ability to support the sector in meeting additional wage costs. If any additional Government funding is provided it would likely come at the expense of other Government funded services.

None of this should come as any surprise to the Australian Services Union or any other interested observer in the equal pay case. What the government has done in its submission is simply expand on the key issues contained in the heads of agreement signed between Ms Gillard and Ms Linda White from the ASU.

As I stated earlier, the government is serious about equal pay, and Fair Work Australia has a difficult job ahead of it. The Gillard government encourages Fair Work Australia to find the right balance between a fair rate of pay for Australian women and maintaining a strong economy. Those are the two key things that everybody wants in this case.