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Wednesday, 10 October 2012
Page: 11770

Ms COLLINS (FranklinMinister for Community Services, Minister for the Status of Women and Minister for Indigenous Employment and Economic Development) (09:57): I move:

That this bill be now read a second time.

This bill will establish a Special Account under the Financial Management and Accountability Act 1997, underpinning the Commonwealth’s contribution of around $3 billion to Australia’s social and community services sector workers following Fair Work Australia’s historic equal pay ruling earlier this year.

The Gillard government welcomes Fair Work Australia’s first ever equal-remuneration order, handed down on 22 June 2012. The order follows Fair Work Australia’s landmark decision on 1 February 2012 to award 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, to be phased in from 1 December 2012.

Of around 150,000 workers in this sector, approximately 120,000—the vast majority—are women. Fair Work Australia found that their work has long been undervalued because of gender considerations.

And yet these workers make a real difference every day to the lives of many vulnerable members of the community, taking on some of the most challenging jobs including counselling families in crisis, running homeless shelters, and working with people with disability and victims of domestic violence or sexual assault.

This Fair Work Australia decision is an important step on the road to closing the long-standing gap between men and women and delivering fairness in the workplace. It is unacceptable that women earn on average one-fifth less than men full-time—the equivalent of working nearly seven weeks a year for free.

This historic equal remuneration order was made possible only because this government removed the barriers to pay equity claims in the Commonwealth jurisdiction. Previously, the legal test to prove discrimination allowed consideration only of 'equal work', rather than the new, broader test of 'equal or comparable' work. As a result, it is only with this case that an equal remuneration claim has succeeded under Commonwealth workplace relations law. And around $3 billion in funding is being provided to meet the Commonwealth share of the costs of these pay rises for social and community sector workers in Commonwealth-funded programs, including programs funded under agreements with and payments to states and territories, such as National Partnership Payments and National Specific Purpose Payments.

This bill will establish a Special Account under section 21 of the Financial Management and Accountability Act 1997 to allow delivery of this funding.

The Commonwealth supplementation will be delivered through funding drawn from the Special Account by eight Commonwealth agencies and allocated to assist employers, who are directly and indirectly funded by the Commonwealth for the purposes of a program prescribed under the new legislation, and who are required to make payments to their employees under the pay equity arrangements.

This includes Commonwealth-funded service providers who are subject to the transitional pay equity order made by the Queensland Industrial Relations Commission on 12 June 2009. These Queensland social and community sector services workers will be transitioned over time to the Fair Work Australia equal remuneration order. The pay increases are to be phased in over eight years, in nine equal instalments from 1 December 2012 to 1 December 2020.

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. This approach will allow community sector organisations delivering Commonwealth-funded programs to pay the new rates without reducing services to the community.

A significant amount of Commonwealth funding will be provided to the sector through state and territory governments for agreements with and payments to States and Territories, such as National Partnership Payments and National Specific Purpose Payments. This bill will enable funding to be paid to the COAG Reform Fund established under the COAG Reform Act 2008 for this purpose. The Gillard government expects state and territory governments to pass on the full amount of funding and to meet their obligations by also committing their share of funds.

Every day, the social and community services sector delivers vital services to hundreds of thousands of vulnerable Australians. We want to make sure the sector is strong and productive into the future.

In coming years, we will need to attract and retain more workers in this sector of the economy, and especially in 'caring' work, which has historically been performed mainly by women.

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.

Debate adjourned.