Senator the Hon Katy Gallagher

GREG JENNETT, HOST: Alright, as we’ve been covering in other discussions on the program, new data’s been released showing the gender pay gap, while tightening, is still wide open. So, to be precise, a 21 per cent gap, which translated means if a woman and a man were on par right now in November, the woman would effectively work for free until the end of the year to generate that 21 per cent gap. Not only is this being measured by a government agency, bigger sticks are about to be wielded against private companies to try and change it. The Minister for Women and Finance, Katy Gallagher, is here to discuss it. She joins us in the studio. Welcome back, Katy. So, we’ve got this average gap coming down by 0.6 per cent, to be precise. The main driver is a lift in wages for lower-paid workers in feminised sectors, the report tells us. Does that mean that without government subsidies for childcare workers and aged care workers, it actually would not have closed at all?

SENATOR THE HON KATY GALLAGHER, MINISTER FOR FINANCE: So, that’s the most significant contributor to the reduction that we’ve seen in the last 12 months. So, there’s a couple of drivers behind the gender pay gap – this is total remuneration, so it looks at levels of women in leadership and management, the higher-paid jobs, it looks obviously at how many women and men you have in the industry. There’s a couple of different drivers. So, this is really important, narrowing it, but there’s more work to be done. But we’re seeing it come down and part of that is the investment in those sectors which are highly feminised and have been underpaid and undervalued for too long.

JENNETT: I can see why the Government would take credit for that, because you’ve had to pump a substantial amount of money into achieving it, but it doesn’t suggest it’s sustainable if the only way of closing the gap is government funding?

GALLAGHER: Well, I don’t think it is, and that’s why part of the legislation that we’ve moved – the Assistant Minister, Kate Thwaites, moved in the House today – was about not just reporting gender pay gaps but actually having a plan to narrow them. And so, that’s the new requirements that’ll be required for big companies – so, those with 500 employees and more will have to set some targets to say, not only are we reporting it, but this is what we’re doing about it. Because we really think that’s the next step in the work that WGEA wants to focus on.

JENNETT: Alright, so let’s talk about that bill. You pretty much summarised it for me right there. Non-compliance to the targets that have been set by each firm, what does that carry by way of consequence?

GALLAGHER: So, this isn’t looking at kind of a punitive arrangement. If you were seen to be non-compliant after a period of time – so, you can set your targets and then you have to explain to WGEA how you’ve been trying to meet your targets. And there will be some reasons why people might not meet them. But if they’ve shown reasonable steps to meet them, that will factor in. But there is that public, kind of, identification of you being non-compliant with the Act. And we know most people want to take action in this area, they don’t want to be non-compliant. And so, we feel – and this has been heavily consulted upon – that most of those big companies either have strategies in place now or are actively working to close the gender pay gap.

JENNETT: So, you don’t think any – on current indication – would be non-compliant?

GALLAGHER: Look, we’d have to, I mean, we are reporting the gender pay gap now publicly. So, for the first time, at an individual company level – it’s not at an industry level. I think that in itself has shifted the dial and sort of focused the mind. Because within the same industry, you’d have some doing quite well and others not doing quite well, and we want to reward that effort that’s been put in. So, I think the individual naming of companies is important. And then, you know, allowing good dialogue. This isn’t about wielding a big stick or anything like that, it’s about genuinely working together in partnership to drive the change across the economy. So, it’s women in leadership, making sure you’ve got flexible working conditions, part-time arrangements, all of those things that we know women value, and also looking at your make-up of your workforce and trying to find balance there.

JENNETT: So, there’s being named by the agency. I think it reserves the right to publish in newspapers. But is there not a linkage – and I think you foreshadowed this – a linkage across into government procurement? If a firm is non-compliant against this bill that Kate Thwaites has presented, what are the consequences for dealing with the government?

GALLAGHER: Yeah, so of course, we would be looking at this data in who the government engages with with work. There’s obviously a whole range of procurement arrangements, which aren’t in the control of ministers, quite appropriately. But I think that would only come into play, I would see it, if we had a big company that was refusing to take steps to close their gender pay gap. And I can’t think of one of those big companies that you would be able to say is in that world.

JENNETT: Even in really blokey sectors? I mean, defence and defence industry would be one example, I suppose.

GALLAGHER: Yeah sure, but if they were demonstrating steps of trying to either bring more women into the workplace or create a working environment where we’re seeing women progress through to promotion, I mean, it depends on the targets that are finally agreed. But sure, if people are being pretty blatant about having no engagement on this issue, I think the government would look on that with pretty negative eyes. But this is about an attitudinal change, a community change, and we’re trying to provide leadership. It’s working. Over the last two years, we’ve seen a big increase in what women are taking home on average in their pay packets. And that makes a difference.

JENNETT: Let’s move on from that. The Treasurer addressed the House today with an economic update. He did touch on, I suppose, a bit of a preview to MYEFO in December. Treasury’s growth forecast will show it expects slow growth to continue and it’s revising down company tax revenue for the first time since 2020. This is a pretty clear indication, isn’t it, that the $28 billion deficit will be bigger?

GALLAGHER: Well, there’s a range of different things that go into MYEFO and decisions that all interact with each other. So, we’ll be releasing that in December as we normally do. But you know, I think the point the Treasurer was making was, whilst we are seeing soft and subdued growth and that’s having an impact, including on revenue, we are seeing other areas of strength, like in our labour market and getting wages moving again and things like that. So –

JENNETT: Are spending cuts an option? If you were to avoid a deficit blowout, presumably they’d have to be?

GALLAGHER: Well, I was just saying in the Senate, we’re taking the same approach to this MYEFO as we’ve taken to our budgets and the MYEFO before, which is looking to where we can find savings, looking at where we can reprioritise spending, really trying to ensure, you know, that it’s quality – where we do provide additional investments, it’s quality spending that’s driving an outcome that we want to see. And you know, all of that is interconnected. So, we’ve turned two deficits, two record deficits, into record surpluses. So, we’ve done a lot of heavy lifting, but this year and next year were always going to be the difficult years in terms of the budget balance. But we’re taking that same responsible approach.

JENNETT: Alright, we’ll get to MYEFO before too long. As you mentioned, you have been in the thick of it in the Senate, all eyes are falling on that particular chamber. I must say, it’s moving very slowly. I’m not even sure one bill has been passed this week, correct me if I’m wrong. Some things probably won’t come to a vote at all. International student caps – we know exactly what the Coalition’s doing. Will you even put that to a vote?

GALLAGHER: Look, I think certainly that’s in our program. We’ve got a lot of important legislation across schools, universities, aged care. There’s some national security legislation. There’s pay rises for early childhood educators. So, we’ve got a big agenda. We need to get some of that through. And look, we’ve been working with kind of a difficult Senate for over two years now. It’s got a big crossbench with varied views, wide and varied views and personalities. And we’ve got an Opposition that likes to say “no” a lot. And that provides us – it sets a lot of challenges for us.

JENNETT: Well, it sure does.

GALLAGHER: I’m an optimist by nature, Greg, and I’m very hopeful – even if we don’t make much progress this week – that people will make those decisions in the interests of the country and get a lot done next week.

JENNETT: Really? I’m not sure what feeds that optimism. You’re going to look into the whites of their eyes and threaten them with many late nights or sitting through to Christmas, I imagine?

GALLAGHER: That’s right, well, maybe we can catch up next week and see how we’re going, maybe I won’t be so optimistic then.

JENNETT: Well, I’ll test your optimism at about this time next week. Katy Gallagher, thanks so much.

GALLAGHER: Thank you.