ACT Council of Social Service Inc.

Justice | Equity | Social Inclusion | Reconciliation

COSS media release: PM called on to protect equal pay funding for feminised caring sector

16 December 2019

Joint Councils of Social Service media release. Original post on the ACOSS website.

The Councils of Social Service (COSS) Network, representing the community sector across Australia, is calling on the Morrison Government to prevent impending cuts to community services, which would negatively impact the national gender pay gap. The COSS Network has written to the Prime Minister urging him to secure ongoing funding for affected services.

In the shadow of the Mid-Year Economic and Fiscal Outlook (MYEFO), the community service sector is extremely concerned about the impact that these cuts of approximately $500 million per annum would have on people, families and communities across Australia.

ACOSS CEO Dr Cassandra Goldie speaking on behalf of each of the COSS Directors from across the nation said: “For years, work performed by workers in the community services sector was undervalued, because ‘caring work’ was considered women’s work, and because our sector is predominantly female. Government funding levels reinforced this undervaluation.

“After years of campaigning by workers, their union(s) and the sector as a whole, in 2012 the Fair Work Commission concluded an Equal Remuneration Order (ERO) was appropriate to address this discrepancy. The sector saw significant increases in wages, and a commitment was forthcoming from the Commonwealth Government to increase funding to pay these higher wages.

“This funding was guaranteed until June 2021 by legislation, and there is currently no budget provision to continue funding beyond that date.”

“This funding is vital to ensure that organisations funded by the Commonwealth can deliver the services that communities, families and individuals rely on.

“It ensures that organisations can deliver quality services to people, families and communities across the country, including some of the most disadvantaged people in our community.

“This funding affects homelessness services, services to families and children, domestic violence services and other community services.

“Without this funding, devastating cuts to services to some of the most vulnerable people in our community are inevitable.

“Cutting this funding would mean that the gains in gender equality achieved as a result of the 2012 equal pay case would be put at great risk, impacting the national gender pay gap.

“We call on the Commonwealth Government to address this issue of fair pay and gender equality and continue to fund the community services that we all rely on.”

Media contact: Monique Vandeleur, ACOSS, 0419 626 155.

Background:

In 2012 the Fair Work Commission made a landmark decision that addresses the gendered undervaluation of work performed in much of the community services sector. As a result, wages increased by up to 45% over 8 years, and most governments across Australia, including the Federal Government, provided additional funding to ensure that community sector organisations could address the gender based inequality in wages paid to workers in our sector, and maintain essential services to communities.

Since 2012, the Federal Government has delivered additional funding (in the form of ERO supplementation payments) to most Commonwealth funded organisations to help meet the cost of higher wages.

Future cuts to ERO supplementation

Without an ongoing budget commitment, the effect of the ERO legislative guarantee ending will be that the Federal Government will no longer pay ERO Supplementation from July 2021 on most grants and that funds will not be available to increase the base rate of affected grants to include the supplementation. If the base grant for programs currently receiving ERO supplementation does not rise to incorporate the ERO payments, it will result in significant funding cuts for community sector organisations delivering federally funded programs. This will mean cuts to the services that people in communities across Australia rely on. It also means that the gains in gender equity achieved as a result of the Equal Remuneration Order will be diminished by job cuts in the community sector’s predominantly female workforce.

This issue affects all organisations who are receiving ERO Supplementation from the Federal Government. It also affects organisations that have contracts with state governments that are funded jointly with the Commonwealth (i.e. National Partnership Agreements) that receive ERO supplementation, although as we understand it, the new National Partnership Agreement on Legal Assistance Services will include funding for ERO payments, incorporated into baseline funding from 2021/2022.

Legislative guarantee of ERO supplementation until 2021/2022

Funding for ERO payments is secured (until June 2021) by an act of the Commonwealth Parliament, the Social and Community Services Pay Equity Special Account Act 2012. Under this act, the last payment to the special account occurs on 1 July 2020, which is why ERO payments currently cease in July 2021. The payment to the special account in 2020 is $554 million.