Ai Group Annual Personnel and Industrial Relations Conference
Good morning and thank you for inviting me to talk to you today about the Gillard Government’s new workplace gender equality reforms – including the Equal Opportunity for Women in the Workplace Amendment Bill.
I begin by acknowledging the traditional owners of the land on which we are meeting, the Ngunnawal people and pay my respects to their Elders, past and present.
I also acknowledge my fellow Tasmanian and one of my constituents in the seat of Franklin, Senator Eric Abetz, who addressed you this morning.
I congratulate Mr Innes Wilcox on his appointment as CEO of Ai Group. I understand today is your first official day in the post.
I also pass on my thanks and congratulations to your predecessor, Heather Ridout.
She has been a powerhouse for Ai Group and has seen her members through many significant changes in Australia’s workplace relations framework.
Heather is a strong role model for women in Australia and I wish her well in her new position on the Reserve Bank Board
She also made a strong contribution to the development of the workplace gender equality legislation and I thank her and Stephen Smith for their work on these reforms.
Consultation has been the common denominator in the development of the reforms.
Equal Opportunity for Women in the Workplace Amendment Bill
Ai Group has a wide reach – some 60,000 business covering over 1 million employees and has, then, an important role to play in the area of gender equality.
The Government and Ai Group share at least two views in relation to the Equal Opportunity for Women in the Workplace Amendment Bill.
First, that the proposed legislation is progressive and has the capacity to achieve gender equality in the workplace.
Second, we both recognise the productivity benefits of gender equality and to achieve those benefits we need to remove barriers to women’s participation in the workforce.
The Bill delivers on the Government’s 2010 election commitment to retain and improve the Equal Opportunity for Women in the Workplace Agency and Act.
I introduced the Bill into Parliament in March.
It is currently before the Senate Education, Employment and Workplace Relations Legislation Committee.
The reporting date for the Committee is Budget day May 8 and I look forward to the Bill progressing through Parliament as soon as possible after that date.
This will enable us to get on with the next stage of talking to human resource practitioners about the detailed implementation of the Bill at the workplace level.
Ahead of these conversations, it’s timely to remind ourselves why this Bill is so important and how we have arrived at this point.
The case for change
There is a strong case for change.
Women are leaving school as well educated and skilled as their male counterparts.
Yet, only 59 per cent of women are participating in the workforce, compared with over 70 per cent of men.
This ranks Australia 45th in the World Economic Forum’s 2011 Global Gender Gap when it comes to labour force participation – and 17th among the 34 countries in the OECD.
Around 43 per cent of women participating in the workforce are working part time.
Casual and part-time work suits many women – but it also means they earn less and their employment arrangements can be less secure.
Even women working full-time earn less than their male counterparts. The gender pay gap in Australia is almost 18 per cent – one of the highest in three decades.
The gender pay gap starts early – within the first year of completing a tertiary qualification.
In December 2011, the median full-time salary for a male graduate was $52,000, compared with $50,000 for female graduates.
The different workforce experiences of women and men have long-term implications.
Women are more vulnerable to poverty in retirement.
The average superannuation balance for Australian women is 40 per cent below that of men and average payouts are half those of men.
Women make up around 70 per cent of single age pensioners.
Addressing these inequalities all comes back to breaking down the barriers for women’s workforce participation.
Increasing workforce participation won’t just help individual women – the benefits are far-reaching.
Supporting women to join, re-join, or stay in the workforce can help solve the skills shortages problem that many Australian businesses are facing.
And closing the gap between women’s and men’s workforce participation could boost gross domestic product by 13 per cent.
This Government has worked hard to make sure its policies and practices support improved productivity and address current and future skills shortages.
Improving women’s workforce participation is central to those key policy objectives.
Gender inequality is a significant disincentive to women’s workforce participation.
The Amendment Bill and a number of the Government’s other key reforms are aimed firmly at supporting and driving improved gender equality outcomes in Australian workplaces.
Boosting the economic security of women
The Gillard Government is taking a determined and strategic approach to improve women’s economic security over the course of their lives.
We want to create the flexibility for more women to join the workforce – or to work for as long as they want.
That’s why we’ve introduced the first paid parental leave scheme in the history of this country. More than 150,000 Australian families have claimed Paid Parental Leave since it started.
That’s why we’ve increased the rebate for out of-pocket expenses for child care from 30 per cent to 50 per cent.
That’s why we are committed to improving women’s participation on Government Boards.
And it’s why we are reforming the Equal Opportunity for Women and the Workplace Act – and the Agency.
We also want to help women make the most of their working lives – and we are making significant reforms to superannuation to achieve that goal.
More women entering the workforce, more women staying in the workforce and more of their talents being recognised and rewarded will mean a smarter, more productive workforce.
Breaking down the barriers
The Equal Opportunity for Women in the Workplace Amendment Bill 2012 has a strengthened focus on gender equality – the coverage of the Act has been expanded to both women and men.
The Act will be renamed the Workplace Gender Equality Act and the Equal Opportunity for Women in the Workplace Agency will be renamed the Workplace Gender Equality Agency.
It acknowledges pay equity and the caring responsibilities of both women and men as central to achieving equality.
The aim of the Amendment Bill is to assist businesses to change culture and advance gender equality in their workplaces.
In its submission to the current Senate Committee inquiry, Ai Group acknowledged the extensive consultation that has taken place during the review phase and in development of the Bill.
In reviewing the legislation and drafting the amendment bill, Ai Group was represented on the Project Reference Group and on the Implementation Advisory Group.
In addition there were extensive consultations with employers directly and human resource practitioners through roundtables and surveys both during the review and legislative development phases.
Such a comprehensive consultation strategy has taken time, but this has been a good investment.
We want to get it right and we will continue to work with business as the various stages of the legislation progress and become reality.
Business identified a number of reforms to make the Act and the operations of the Agency more effective and efficient, particularly around reporting.
This has been a strong driver in the reform package.
Cutting red tape
The gender equality reforms are significant and progressive, but the regulatory model underpinning them is in essence unchanged from 1999 Act.
Some parts go back even further to the original Affirmative Action Act in 1986.
The existing Act, introduced under the Coalition Government in 1999, requires businesses with 100 or more employees to lodge annual reports on their workplaces containing gender-based data.
The current Act allows the naming of employers who fail to fulfil these obligations and for them to be excluded from Government contracts. These provisions have stirred some controversy recently – but they are not new.
The new Act doesn’t seek any further compliance measures.
We are making an existing responsibility, simpler, less onerous and more useful.
The key emphasis remains on providing businesses with the support, advice and education that we heard emphatically throughout the review is valued highly by the private sector.
The CEO of each business will have to sign off on its report.
This will allow the people in charge of the business to see where attention is needed and where opportunities exist to improve business productivity and competitiveness.
The Ai Group and others are seeking assurances that this new focus will not add further red tape for business.
Reducing the burden on businesses was a central term of reference to the review and it is an important feature of the Bill.
It will be an explicit function of the Agency to work with employers to maximise the effectiveness of the Act including through the reduction of the regulatory burden.
Simplifying the reporting process
We have listened closely to what employers and HR professionals were telling us about how to improve the reporting process.
The focus will shift away from lengthy descriptions about workplace programs and uncertainty about what to report on or what constitutes compliance.
Changing reporting, to make it easier and more useful, is integral to the Bill.
Reporting will now be standardised, based on gender equality indicators.
Employers will be able to lodge their reports online – as they’ve requested.
Businesses will provide key gender-specific information like the number of employees, their leadership level, their type of employment and what they are paid.
The key innovation is standardisation of reporting – it will create a valuable feedback loop for employers and the Agency.
It will enable organisations to see, very clearly, how they are going from year to year and how they measure up compared to their competitors.
Benchmarking information, such as this, was called for by employers and has the support of Ai Group.
The standardised, outcomes-focused data will now enable the Agency to deliver this type of information – adding, in a significant and meaningful way, to its advice and education function.
I am confident this will reduce the regulatory burden. The benefits will be immediate for those companies who already have good systems in place.
For those that don’t, there may be some initial set-up considerations. We recognise that and so does the Bill.
We are phasing-in reporting under the new system. It will not commence until 2014 and the actual reporting matters will be introduced over time.
Ai Group has also raised questions about the proposed minimum standards and how they will work in practice.
The minimum standards will operate as an evidence-based mechanism to identify and focus intensive assistance on a small, targeted number of relevant employers most in need.
These standards will be developed in close consultation with business representatives and practitioners – this will make sure they are workable, practical and meaningful.
The minimum standards will be set by disallowable Ministerial instrument.
This means that each and every reporting matter will be able to be scrutinised by Parliament and by the public.
We have got quite a bit of time to get the minimum standards right – they aren’t required to be set until before the reporting period 2014 to 2015.
Businesses will only be found non-compliant if they don’t improve against a minimum standard over a two year period.
Non-compliance with the Act will only result in an employer being named to the Minister if the employer doesn’t have a reasonable excuse for being non-compliant.
The earliest that any business could be found non-compliant with the proposed legislation as a result of not meeting minimum standards would be 2017.
As Minister, I need to approve these standards. I can assure you that they will not be about setting unrealistic targets or quotas.
Organisations who fail to meet minimum standards will be provided with two years to access additional assistance from the Agency and to demonstrate an improvement against a particular standard.
More funding for support and education
When seen as a whole, the processes of reporting, standardised data and education stand together to drive sound workplace practices and to deliver gains to the economy, to individual employers and to employees.
The Government is providing the new Agency with an extra $11.2 million – a doubling of funds – to provide practical help, education and advice.
Rewarding business for promoting gender equality
We know there are an overwhelming number of employers out there doing the right thing when it comes to gender equality in their workplaces.
Educating employers to achieve cultural change and recognising good performance is a great combination.
For example, a couple of years ago, the current Agency worked with Cement Australia to look into pay equity within the company.
What this revealed was that Cement Australia had been working very hard to break down the gender bias in their organisation.
They had brought more men into customer service and administrative roles, which had been typically the domain of women.
At the same time, they increased the proportion of women in roles traditionally held by men, such as in supply chain and logistics.
They introduced flexible working arrangements so that both company needs and family needs were considered.
Their gender pay gap sat at only 5 per cent.
In 2009, Cement Australia received the Minister’s Award for Outstanding EEO Practice.
Cement Australia continues to monitor their pay grades and workplace arrangements closely.
They can be proud of their achievements and they set a fine standard for the future in Australia’s manufacturing and construction industries.
We know that activities to reward high-performing employers, like the Minister’s Award for Outstanding EEO Practice and Employer of Choice Awards, are valued by industry.
This is why an express function of the Agency will be to undertake programs for the purpose of promoting workplace gender equality.
Offering incentives to employers and recognising the great achievements being made will also continue to be one of the Agency’s roles.
The increased funding for the Agency will enable it to support further high-value activities to promote good work.
These reforms modernise and improve on the existing legislation.
They represent a modest investment to better align the Act with the Government’s overall policy objectives of improving women’s workforce participation and to enable improved gains in Australia’s productive potential.
This Bill is not about industrial relations reform, it is about working with business to achieve cultural change.
There is a great deal of goodwill between employers, the Agency and the Government to continue to build gender equality improvements through collaboration and consultation.
I am confident the Amendment Bill delivers gains to business, to the economy and to employees, and that overall it achieves a fair balance.
I look forward to continuing to work closely with Ai Group and its members to bring the benefits of these reforms to fruition.