‘Unfair’: Peak Body Criticises Impending Bill Forcing Businesses to Set Gender Targets

‘It creates an unfair competitive environment for domestic as compared to overseas businesses,’ said Ai Group’s head of industry development and policy.

People walk past a Coles supermarket in Melbourne's central business district (CBD) in Australia on Nov. 27, 2024. William West/AFP via Getty Images

A major industry body has warned Australia’s impending gender equality bill will be unfair and discriminate against the country’s medium to large businesses.

This comes as the Labor government pushes for the Workplace Gender Equality Amendment (Setting Gender Equality Targets) Bill 2024 to pass the federal parliament.

The Bill (pdf) seeks to amend existing laws to accelerate “gender equality” in workplaces by requiring large employers set measurable targets in areas such as gender composition, equal pay, flexible work arrangements, and anti-discrimination measures.

Under the Bill, businesses will have three years to achieve or improve the targets they select. If they fail without a valid excuse, they will not receive a certificate of compliance, making them ineligible to bid for federal government contracts worth $80,000 (US$50,000) or more.

New Bill Creates Unfairness: Peak Body

During a recent parliamentary inquiry, Louise McGrath, head of industry development and policy at the Australian Industry Group (Ai Group)— which represents 60,000 employers—said the Bill unfairly targets businesses with over 500 employees.

“It applies in a discriminatory and unfair way against employers who have made significant progress,” she told the Finance and Public Administration Legislation Committee.

She said that penalising businesses by blocking access to government contracts contradicts federal procurement rules and the World Trade Organisation’s principles of competitive neutrality, which ensure businesses compete on a level playing field.

“[The Bill] will result in different targets being applied to different businesses, which undermines the principle of competitive neutrality and a level playing field,” she said.

McGrath added that punishing businesses by making them unable to bid for government contracts was inconsistent with the objectives of improving gender equality in the workplace.

“Locking members out of government procurement is not light touch, and it is not collaborative, especially in circumstances where there is no ability for members to adapt targets during the three-year period,” she said.

Furthermore, the Ai Group representative noted that the Workplace Gender Equality Agency (WGEA) would have great discretion under the Bill to determine whether businesses have achieved the target or had a reasonable excuse.

She was also concerned that businesses would be unable to appeal the WGEA’s decisions, as the Bill did not provide a review mechanism.

Workers lay concrete at the construction of a new apartment block in Melbourne, Australia, on June 5, 2018. William West/AFP via Getty Images

Challenges for Businesses

The Ai Group representatives also pointed out the practical challenges of setting gender equality targets, particularly in male-dominated industries.

One major problem, according to McGrath, was the difficulty in proving the progress made by business investments over a period of time.

“The challenge with some measures is they capture a singular moment in time, and so you can’t demonstrate the expected progress of the investments you’re making today that you hope will have an impact in perhaps five to 10 years,” she said.

Yoness Blackmore, a principal advisor at the Ai Group, said it was difficult for businesses to change their culture overnight to meet gender equality targets.

“Many of our members have legacy issues. They may have super strong, equitable practices, but they still face difficulties in getting improvements in [gender equality] areas, particularly in industries like construction, trades, technology and energy,” she said.

“The employer is not solely responsible for this because there’s a long pipeline leading into this.

“For example, in engineering, I think there are 20 percent females actually doing the qualification at university, and that already places some of our members at a disadvantage.”

Another issue is the financial burden incurred during the compliance process.

“The cost of complying for all businesses, I think, would actually be beyond the capacity of some of the very small businesses, but also would put Australian firms at a disadvantage to foreign firms and government procurement,” McGrath said.

“And in a time of high inflation and cost pressures, it would actually cause government procurement costs to rise, which would have a significant impact on the economy.”

She also noted that businesses do not have infinite resources, and that the money spent on gender equality reporting would reduce opportunities for investment in areas like production, research and development, and marketing.