'More companies will have an opportunity to secure public sector contracts when they need them most'
The Australian government is said to be reversing a commitment to mandate gender equality targets for businesses vying for government contracts, garnering praise from employers.
The move weakens the proposal first outlined in 2024, which required businesses with more than 500 employees to meet gender pay gap targets to be eligible for Commonwealth grants or contracts.
But a Senate inquiry revealed that the new rules would not be as binding as initially expected, The Canberra Times reported.
Megan Leahy, First Assistant Secretary in the Office for Women, confirmed on 22 January that companies failing to set gender equity targets could still win government contracts.
"I wouldn't say it's a very hard barrier," Leahy stated as quoted by The Canberra Times. "It's not a barrier that excludes."
Instead, the presence or absence of gender equity targets will just be considered when awarding contracts, with departments to have final say on whether to award a contract to a non-compliant business.
The Ai Group, national employer association, said it welcomes the reported development of the legislation.
"Reports that the federal government has reversed its proposed onerous gender equality targets for businesses to be eligible for government procurement programmes will mean that more companies will have an opportunity to secure public sector contracts when they need them most," said Innes Willox, chief executive of Ai Group, in a statement.
The Workplace Gender Equality Procurement Principles outline the steps employers need in order to participate in government procurement.
To be awarded a contract, employers must provide a Certificate of Compliance, which can be issued by the Workplace Gender Equality Agency (WGEA).
"The WGE Procurement Principles form part of a connected Australian government procurement policy," WGEA said on its website.
"They are part of the government's commitment to provide fair and consistent rules to ensure the Government deals exclusively with relevant employers that are compliant with the Act."
According to Willox, the principles already underscore the need for employers to comply with the Workplace Gender Equality [Act].
"The current principles that underpin government procurement in Australia promote competition, efficiency, and transparency and ensure value for money for every taxpayer dollar that is spent," Willox said.
"So the thought of more red tape and regulation would have made it too hard for many businesses."
A spokesperson for Minister for Women Katy Gallagher reiterated that the bill would still require large companies to set gender equity targets.
"This bill lifts the bar for bigger companies and increases transparency for their employees and the public about the actions these companies are taking in their workplaces to make progress on gender equality," the spokesperson said.
Willox said he looks forward to coming up with a new approach to gender targets in workplaces.
"We look forward to working with government to design appropriate implementation of this new approach to gender targets and to reaching a sensible decision in what is a tough environment for businesses," he said in a further statement.
In Australia, findings from WGEA's Gender Equality Scorecard 2023-24 revealed 90% of employers have a policy or strategy in place to support gender equality in the workplace. Another 45% who are setting targets said they are aiming to:
"Evidence shows the actions employers are taking, particularly in relation to target setting, will drive improved results in future years," the WGEA report read.
