The claim
Barely a year after the election of the Albanese government, Opposition Leader Peter Dutton is setting his sights on the next federal poll.
In an address earlier this month to the national summit of the Council of Small Business Organisations of Australia, Mr Dutton spruiked a long list of plans for the future as well as the Coalition's previous achievements, including its record on women's economic issues.
"Under Labor, the gender pay gap was at 17.4 per cent and reduced to 13.8 per cent on our watch," Mr Dutton told the gathering on April 4.
Is that correct? RMIT ABC Fact Check finds out.
The verdict
There's more to the story than Mr Dutton's claim suggests.
Indeed, the gender pay gap was at 17.4 per cent when Labor left office in late 2013.
The pay gap also fell steadily during most of the Coalition's time in government, reaching 13.8 per cent in November 2021 (although it did rise again in the months prior to the May 2022 election and was 14.1 per cent when the Coalition was ousted).
That said, the gap also peaked during the Coalition's nine-year reign at 18.7 per cent, which was higher than it reached during the Rudd-Gillard or Howard governments.
Moreover, since the election of the current Labor government, the pay gap has fallen to a historical low of 13.3 per cent.
Experts told Fact Check that changes in the gender pay gap were mostly driven by wider economic conditions, but government policy could also play its part in addressing the issue.
What is the gender pay gap?
As Fact Check has previously explained, the gender pay gap is the difference between the average full-time earnings of men and women, expressed as a percentage of men's earnings.
Australia's Workplace Gender Equality Agency (WGEA) is tasked with measuring the pay gap in Australia, and relies on the Australian Bureau of Statistics' weekly full-time earnings data, which is published biannually.
According to the WGEA, the gender pay gap is a "measure of how we value the contribution of men and women in the workforce".
Importantly, the gender pay gap is not the same as unequal pay; that is, where men and women are paid differently for performing the same role.
"Gender pay gaps are not a comparison of like roles," the WGEA outlines on its website.
"Instead, they show the difference between the average pay of women and men across organisations, industries and the workforce as a whole."
The data
Fact Check has used seasonally adjusted ABS weekly earnings data and the WGEA's method for calculating the gender pay gap to establish a pay gap timeline dating back to 1994.
While Fact Check has previously used the ABS's trend estimates to calculate the gender pay gap, such estimates were paused during COVID-19 and reinstated only for the most recent weekly earnings data release. Despite this reinstatement, the ABS has noted:
"The key figures and graphs in the Average Weekly Earnings release will continue to focus on seasonally adjusted estimates."
In addition, the WGEA's latest gender pay gap reports utilise seasonally adjusted — rather than trend — data.
The seasonally adjusted data shows that while Mr Dutton's numbers are indeed accurate for distinct points in time, they fail to capture fluctuations in the pay gap over longer periods.
According to the data, during Labor's time in office (from December 2007 to September 2013), the pay gap increased from 15.5 per cent to 17.4 per cent.
Following the Coalition's return to power in 2013, the pay gap spiked at a 30-year high of 18.7 per cent (November 2014) before steadily falling to 13.8 per cent in November 2021. It had rebounded to 14.1 per cent by the time the Coalition left office last year.
Leonora Risse, a senior lecturer in economics at RMIT University and research fellow at the Women's Leadership Institute Australia, told Fact Check in an email that a "fuller picture" could be gained by "measuring the average gender pay gap" over time.
According to Dr Risse, this showed the pay gap to have averaged 17.1 per cent during Labor's time in government (to 2013), and 15.4 per cent over the course of the Coalition's stint in office.
Drivers of the pay gap
As Fact Check detailed in 2018, changes in the gender pay gap have been driven largely by wider economic conditions, rather than government policy.
As experts have previously explained, the pay gap is likely to be narrower when the economy is performing poorly, and wider during economic booms.
This is because men are more likely to work in highly paid jobs in industries with more exposure to economic swings, such as the mining sector.
According to Alan Duncan, of the Bankwest Curtin Economics Centre (BCEC), that advice has not changed.
"It has been the case that, as the economy cools down and as skills shortages increase, that does tend to be associated with some narrowing of the gender pay gap," Professor Duncan, who is a lead author of BCEC's annual Gender Equity Insights report, told Fact Check.
"Gender segregation and gender concentrations across industry sectors have a lot to do with the size of Australia's gender pay gap," Professor Duncan said.
"There is a combination of high pay in male-dominated sectors and relatively low pay in sectors dominated by women."
This point was echoed by Rae Cooper and Elizabeth Hill, of the University of Sydney's Gender Equality in Working Life Research Initiative, who told Fact Check:
"One of the main reasons for the long-term gender pay gap in Australia is structural inequality and differences in our labour market. Australia has one of the most highly gender-segmented labour markets in the OECD."
In an email, they noted that the peak of the gender pay gap in 2014 was "largely a reflection of the impact of the mining boom on male wages compared with women's wages".
"The mining boom delivered strong employment growth in high-paid mining jobs, which are typically done by men. The boom drove up average male wages relative to female wages and this is reflected in the national gender pay gap data."
Once the effects of the mining boom dissipated, Professor Cooper and Dr Hill said, the pay gap narrowed.
Dr Risse, meanwhile, told Fact Check the narrowing of the pay gap under the Coalition could "be mathematically explained by an overall slowdown in nominal earnings growth, for both men and women".
"Because men's earnings growth slowed down even more than women's, this led to a narrowing of the gap," she said.
"During Labor's term, men's earnings grew by an average of 2.4 per cent every six months, while women's grew by 2.2 per cent. During the Liberal's term, men's earnings growth slowed down to an average of 1.2 per cent, while women's earnings growth slowed to 1.4 per cent."
What about government policy?
When it came to the influence of governments, Dr Risse pointed to various initiatives that may have contributed to a narrowing of the gender pay gap.
"A major initiative was the establishment of the WGEA as a statutory authority," she said, explaining that the agency's purpose is to "incentivise and support private companies to pay attention to gender inequality within their organisation and take steps to address it".
"Since 2012, we have seen that the decline in the gender pay gap has been more noticeable in the private sector compared to the public sector. While multiple factors contribute to changes in the overall pay gap, this downward trajectory among private sector companies is consistent with WGEA having an impact.
"WGEA was established under the Gillard government in 2012 and was continued to be supported under the Coalition government's term."
She also pointed to a number of policies implemented by the Coalition designed to increase the representation of women entering in traditionally male-dominated industries, but added it was unclear whether they had been rolled out at a large enough scale to have an impact on the overall pay gap or evaluated for their effectiveness.
Additionally, according to Dr Risse, a limitation of such policies was that they were not accompanied by attempts to increase the number of men working in traditionally female-dominated fields.
"This means that we are not really seeing any sizeable shift in gender patterns of industry employment that would be conducive to a narrowing in the gender pay gap."
Experts also pointed to new policies that may play a role in narrowing the pay gap.
Professor Cooper and Dr Hill noted that work in female-dominated sectors was undervalued, and that multiple regulatory changes had not remedied the situation.
"The previous [Coalition] government did nothing to change this," they said. "Recent changes to the Fair Work Act by the ALP hold promise for improving wages in feminised sectors through the industrial relations system.
"This includes introducing specialist panels in the Fair Work Commission to hear applications from unions, and removing any perceived need for a ‘male comparator' in equal pay cases, which has stymied progress."
They added that another driver of the gender pay gap was a lack of flexibility in full-time work, which led to women — who still "shoulder the great majority of unpaid care in Australian families" — working in part-time and casual jobs with lower pay.
"Changes by the ALP to the Fair Work Act in 2022, which become operational this year, may make access to flexible work more attainable by putting some 'guardrails' around the process of requesting flexibility in workplaces (known as the 'Right to Request')."
Professor Duncan, meanwhile, added that recent legislation had been passed requiring both private and public sector employers to report their gender pay gaps.
"It's going to be really interesting to see to what extent that accelerates actions to close gender pay gaps," Professor Duncan said, noting that such mandates on reporting had been successful in other countries.
Principal researcher: Ellen McCutchan
Sources
- Peter Dutton, address to the Council Of Small Business Organisations of Australia National Small Business Summit, April 4, 2023
- RMIT ABC Fact Check, Fact check: Has the gender pay gap shrunk under the Coalition Government's policies?, ABC News, October 2, 2018
- Workplace Gender Equality Agency, What is the gender pay gap?
- Australian Bureau of Statistics, Average Weekly Earnings, Australia, November 2022, February 23, 2023
- Australian Bureau of Statistics, Average Weekly Earnings, Australia, February 2012, May 17, 2012
- Bankwest Curtin Economics Centre and Workplace Gender Equality Agency, Gender Equity Insights Series
- Parliament of Australia, Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill 2023, March 30, 2023
