Commonwealth’s pay equity announcement leaves key questions unanswered

The Victorian Coalition Government strongly supports the principle of gender pay equity.

The Victorian Government is the only government to have set aside specific funding towards an outcome in the pay equity case currently before Fair Work Australia (FWA).

In the 2011-12 Budget, the Victorian Government set aside $200 million over four years to fund pay increases to flow from any decision in the pay equity case.

In proceedings before FWA, the Victorian Government has engaged actively in the process and adopted a very responsible approach.

This morning the Commonwealth Government advised the Victorian Government that the Commonwealth and the Australian Services Union (ASU) have agreed to make a joint submission to FWA, although very little information was provided to enable a proper assessment of the details or effect.

The Victorian Government understands from media reports that the Commonwealth states it will provide $2 billion for wage increases for community sector workers and that the submission will call for a six-year phase-in period to commence in December 2012.

While the Commonwealth says that it will fund its “fair share” of wage increases to flow from a FWA decision, based on 100 per cent of Queensland rates, the Commonwealth has not provided any details of the proportion it proposes to meet. It has also failed to provide information on whether its commitment is ongoing.

The Victorian Government has been advised by the Commonwealth that officials will work through details of arrangements.

The Commonwealth Government did not consult the Victorian Government in formulating its joint position with the ASU.

The Commonwealth’s joint position with the ASU also appears to be inconsistent with its submissions to FWA in the case, which acknowledge that factors other than gender play a role in the undervaluation in wages in the community services sector.

The Victorian Government will now consider the Commonwealth’s joint position with the ASU and seek further information to assess its financial impact and the proposed Commonwealth funding.

To this end, the Victorian Government calls on the Commonwealth to provide full details of what level of funding the Commonwealth considers to be its “fair share” of the costs of the outcome it is proposing, and to guarantee that the Commonwealth’s contribution will be ongoing.

In the meantime, the Victorian Government will remain actively engaged in the proceedings before FWA.