Businesses must set gender equality targets to win govt contracts

Katy Gallagher indicated the change to procurement rules in her first National Press Club address on Thursday, as she unveiled Australia's national strategy for gender equality.

The cornerstone of the strategy will be a commitment to pay super on government paid parental leave from 2025.

This would involve a 12 per cent superannuation guarantee payment, as the government seeks to address the gap between men and women's retirement balances.

"You're paid super on your sick leave, you're paid super on your annual leave," Senator Gallagher said.

"There is no reason why it shouldn't be paid on paid parental leave too."

But the Finance Minister and Treasurer Jim Chalmers will not reveal the cost of the proposal until budget night in May.

The new procurement rules will mean businesses with more than 500 employees must set and progress targets to improve gender equality in their workplaces, in order to be in the running for government contracts.

Senator Gallagher said the government spends $70 billion on procuring goods and services each year and would now "use its purchasing power to better support gender equality outcomes".

"These targets will focus on the gender makeup of their boards and the workforce; equal pay; flexible working arrangements; workplace consultation on gender equality; and efforts to prevent and address sexual harassment," Senator Gallagher said in her address.

"Not only will businesses have to set targets, but they will also have to show progress towards them.

"[The Workplace Gender Equality Agency] is consulting on those targets now."

The details of the new rule are not yet clear - including timelines for progress, and whether companies would be penalised if they failed to show change.

Senator Gallagher did say businesses would be expected to achieve targets they set.

"My experience is, companies work with us, they want government work ... and so this, I think, puts more responsibilities on them," she said.

"But I don't think it's one that they will ... shrug or walk away from."

She said the rule change would be a carrot, not a stick, when it came to encouraging companies to work towards gender equality.

"It's a carrot and, and there's a rule in place already," Senator Gallagher said.

"This is sort of enhancing that rule about, you know, working with companies to sort of mark out a pathway or a plan forward.

"So I see it as a carrot."

The government will also improve its targets for women's representation on its own boards and advisory bodies.

While the Finance Minister said overall representation was at a "record high of 51.6 per cent", this was not even across the public service.

"We are committed to maintaining women's seat at the decision-making table, with targets now applying at portfolio level and to all positions on all Government boards and advisory bodies, as well as to chair and co-chair positions," she said.

The Albanese government's gender equity strategy targets five key areas for improvement, including gender-based violence, unpaid and paid care, economic equality and security, health and leadership, representation and decision-making.

While it lists actions which the government has already taken - for example, releasing its plan to end violence against women and children - it also identifies potential steps yet to be taken.

The strategy was announced after new rules came into effect last week, requiring all Australian businesses with more than 100 employees to publish data on gender pay equity.

"I'm very confident it will drive change and deliver the outcome we want," the Finance Minister said.