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Wednesday, 31 October 2012
Page: 8610

Senator FARRELL (South AustraliaParliamentary Secretary for Sustainability and Urban Water) (12:31): I thank those people who have spoken in this debate. I will make a few comments about the legislation generally and then I will respond as best I can to the questions that Senator Siewert has asked me. We will see if that solves the problems. If not, then we will see what it will take to solve the problems.

This Social and Community Services Pay Equity Special Account Bill 2012 establishes a special account under the Financial Management and Accountability Act 1997, underpinning the Commonwealth's contribution of around $2.8 billion to Australia's social and community services workers following Fair Work Australia's historic equal pay ruling earlier this year. The Fair Work Australia landmark decision awards equal pay to social and community services sector workers in recognition of their tireless work for our community and details how those pay rises are to be delivered. Under the order, around 150,000 of Australia's lowest paid workers will benefit from substantial pay rises of between 23 and 45 per cent phased in from 1 December 2012. The vast majority—120,000—of the workers who will benefit from this order are women. These workers make a real difference every day to the lives of many vulnerable members of the community, taking on some of the most demanding jobs including counselling families in crisis, running homeless shelters and working with people with disabilities and victims of domestic violence or sexual assault. Around $2.8 billion in funding is being provided to meet the Commonwealth share of the costs of these pay rises for social and community sector workers. The pay increases are to be phased in over eight years in nine equal instalments from 1 December 2012 through to 1 December 2020.

The Commonwealth supplementation will be provided through funding drawn from the special account by eight Commonwealth agencies. It will be allocated to assist employers who are directly and indirectly funded by the Commonwealth for the purposes of the program prescribed under the new legislation and who are required to make payments to their employees under the Fair Work Australia order. The phased introduction recognises the complex funding arrangements in the sector which involve local, state and territory governments, not-for-profit organisations, commercial providers and the Commonwealth. A significant amount of funding will be provided to the sector through state and territory governments for agreements with the payments to the states and territories such as the national partnerships payments, the national specific purposes payments. This bill will enable funding to be paid to the COAG Reform Fund established under the COAG Reform Fund Act 2008 for this purpose.

Every day the social and community service sector delivers vital services to hundreds of thousands of vulnerable Australians. Not only are these workers deserving of a fair day's pay for a fair day's work, but properly valuing caring work and providing decent wages in industries dominated by women is an important part of keeping our economy strong and resilient.

There are some consequential amendments, assuming that this bill passes. I will comment on those before I start to respond to Senator Siewert's questions. The Social and Community Services Pay Equity Special Account (Consequential Amendments) Bill 2012 makes one minor amendment to existing Commonwealth legislation to complete the new arrangements. This amendment will insert into the COAG Reform Fund Act 2008 a note pointing out that an amount may be credited to the COAG reform fund under the new social and community services pay equity special account.

The first question of Senator Siewert relates to what the supplementation is covering. The response to that is a phase in over eight years as part of our equal remuneration order. The Commonwealth will pay direct funding through the Commonwealth and state agreements. The second issue relates to disagreements over the amount of supplementation and appeals. The response to this is that, if an organisation disagrees with an offer, they raise it with the relevant departments, provided there is evidence that their costs are higher than the government estimates, and then the government will recalculate. This information will be online in the next two weeks and in letters and offers.

The third question relates to Western Australia: has the government underestimated the costs involved in this? I know you are from Western Australia, so you have a special interest in this. The Australian government is committed to paying its fair share of the costs, and organisations will not be disadvantaged. The condition of the offers will be going out to all of the incorporated and public companies in Western Australia in November this year. The Commonwealth is negotiating with the states and the territories to deliver supplementation in a fair and transparent process.

Senator Siewert, I am sure you will indicate to me if there is something I have missed. If you require any further information, I am happy to attempt to provide that to you.

Question agreed to.

Bills read a second time.