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Monday, 26 November 2018
Page: 11293

Mr WILKIE (Denison) (10:19): I move:

That this bill be now read a second time.

Australia currently has a gender pay gap of 14.6 per cent, which means that on average women earn 14.6 per cent less in the workforce than men. Yes, this gap has been closing in recent years, but there's still a long way to go because it's still higher than the OECD average and in some industries in particular the gender pay gap is staggering. For example, in the finance industry there's a gender pay gap of over 30 per cent; in building and construction it sits at over 35 per cent; and in some sections of the economy such as financial asset broking services it's over 50 per cent. Clearly, this is a big problem, and it's not a situation that any of us should stand by and accept.

There are obviously lots of reasons for this gender pay gap. Indeed, according to the Workplace Gender Equality Agency, they include that women and men are working in different industries and different jobs, with female-dominated industries and jobs attracting lower wages; women's disproportionate share of unpaid caring and domestic work; the lack of workplace flexibility to accommodate caring and other responsibilities, especially in senior roles; and women's greater time out of the workplace, which impacts career progression and opportunities. That's why it's crucial the government work to address all of these areas. For a start, we need to ensure that female-dominated sectors like education, health care and social assistance are properly valued and paid accordingly. Quite simply, it's a disgrace that some people in these sectors who work the hardest are often among the lowest paid. The government also needs to take the lead in encouraging a culture of workplace flexibility, such as policies that support career progression for people working part time, including tackling negative perceptions around men who work flexibly.

The elephant in the room here is, to quote the Workplace Gender Equality Agency, 'discrimination and bias in hiring and pay decisions'. In other words, employers are making the decision, whether consciously or not, to not hire women in the same positions as men and, crucially, to pay them less than men when they do hire them. This leads to workplaces and then whole industries where there is an imbalance—sometimes a huge imbalance—between the amount women and men get paid. It's this inequity in pay that this bill aims to address.

Before I explain how the bill would work, I'd like to talk briefly about where the inspiration for it came from, which is Iceland, where last year their parliament passed amendments to the Act on Equal Status and Equal Rights of Women and Men which, in essence, require companies with 24 or more employees to get independent certification that they pay women and men equally. Equal pay is assessed against an internationally recognised standard, and there are fines—often quite severe fines—for employers who don't comply. The measures will be phased in over the next few years, but already Iceland is being seen as a world leader in tackling the gender pay gap by implementing this certification framework.

The Equal Pay Standard Bill 2018 now before our parliament would establish a similar system. It works in three steps. Firstly, it requires the minister to develop an equal pay standard against which companies will be assessed. There is some flexibility as to what is in the standard and how it is assessed, but it must include a requirement that, when individuals receive different wages, that decision is based on considerations that do not include gender. It can include other requirements but it has to include that as a minimum. The minister also has to consult with employers, employees and small business when developing the standard.

Secondly, this bill requires employers to obtain certification once the standard is in place. The requirement phases in for smaller businesses, with employers with a workforce of over 250 people having to get certification by 1 January 2020 and, at the other end, employers with a workforce of between 25 and 89 people having until 1 January 2023. This bill would apply across the whole economy, public and private, and to all employers with a workforce of 25 people or greater. It also applies to the Commonwealth as a whole. The certification is obtained from a certification body, which is a class of organisations determined by the minister under the act, and which might be, for example, an auditing body. Crucially, though, the minister must make sure that a certification body will carry out its functions competently and impartially.

Thirdly, and most importantly, this bill allows the minister to give a direction to an employer to do whatever is necessary to comply with the equal pay standard and a time frame in which to do so. There are fines of up to $52,500 for employers who don't comply and the option of removing a company's certification if it fails to meet its obligations to pay women and men equally. Also, certification is only valid for 12 months, meaning that employers would need to continually demonstrate they are achieving equal pay. In other words, this bill provides a framework for employers to be forced to clean up their act if they're found to be noncompliant.

Delivering on equal pay through this framework will not be an onerous task for businesses. Employers, obviously, already keep data about the wages they pay their employees and report these to government agencies like the Australian Taxation Office, and small businesses with 25 or fewer employees aren't even covered by this bill. To the extent this is a small administrative burden on some employers, quite frankly it's a small price to pay to get a little bit closer to gender equality.

I would like to now touch briefly on why closing the gender pay gap is important. For a start, not only does being paid less, obviously, affect women's economic security in the short term but they also end up much further behind in the long term, especially when it comes to superannuation. Indeed, a 2017 survey found that, on average, women retire with a super balance of $230,000 while men, on average, retire with around twice that. The gender pay gap also makes it more difficult for women to escape family and domestic violence. According to the Domestic Violence Resource Centre Victoria, for example, the gender pay gap means that women are less likely to build up the financial resources they need to become independent, particularly if they have family responsibilities.

I would like to acknowledge that there is some movement by the major parties regarding the pay gap. For example, the Labor Party has committed to reveal the gender pay gap for companies with over 1,000 employees, and I do applaud the government for their women's economic security package announced last week, although some measures are problematic, like women having to draw down their own superannuation to escape domestic violence, which puts the entire economic burden on themselves.

In closing, can I just say we need a holistic solution to close the gender pay gap, and the measures in this bill would go some way to achieve that. I thank the member for Melbourne for seconding this bill, and I invite him to make a contribution in my remaining time.

The DEPUTY SPEAKER ( Mr Hogan ): Is the motion seconded?