Big business will need to meet gender targets to win slice of $70bn in Commonwealth work: Labor

Big businesses which fail to meet gender-based targets risk missing out on lucrative Commonwealth contracts as the Federal Government harnesses its massive buying power to boost economic equality for women.

Minister for Women Katy Gallagher sees the new procurement policy as a “carrot” – rather than a stick – to encourage companies to bridge the gender pay gap and get more women on boards.

The policy, announced on Thursday as part of a new gender equality strategy, comes a week after the gender pay gap data for almost 5000 of Australia’s largest employers was revealed for the first time.

More than six in 10 employers were found to have pay gaps in favour of men of more than five per cent, according to figures from the Workplace Gender Equality Agency.

In the wake of those figures Senator Gallagher signalled the Federal Government was considering using its $70 billion procurement budget as a tool to push businesses to close the yawning gap.

Appearing at the National Press Club, Senator Gallagher announced the Government would impose a “rule” that businesses with 500 or more employees would need to commit to – and meet – gender equality targets to win Commonwealth contracts.

“Every year, the Government spends about $70 billion to procure goods and services and we think there’s more that can be done to make sure women are getting a fairer slice of that spending,” Senator Gallagher said.

Under the policy, businesses would need to meet targets set against at least three of indicators set out in the Workplace Gender Equality Act.

The indicators cover the gender makeup of boards and the wider workforce, equal pay, flexibility and care friendly work arrangements, workplace consultation on gender equality and efforts to prevent and address sexual harassment.

The Government will also create a new public register that makes it easy to find women owned and led businesses.

Senator Gallagher indicated the register could be set up relatively quickly but did not have a firm start date for new procurement rules.

She said WGEA was consulting on the targets.

The Labor frontbencher – who is also Finance Minister - was confident businesses would rise to the challenge.

“My experience is that companies work with us,” she said. “They want Government work. This puts more responsibilities on them but it don’t think its one that they will shrug or walk away from.”

Senator Gallagher used the speech to announce Labor’s commitment to add superannuation on Government-funded paid parental leave from July 1, 2025.