THE federal government has put the budget surplus ahead of equal pay for women, telling Fair Work Australia it cannot afford higher wages that might result from a test case without cutting services.
The Prime Minister, Julia Gillard, last year signed a deal with the Australian Services Union pledging support for the first test of equal pay rights under the Fair Work Act. The case will be the first to compare the work of women in a female-dominated industry with that of men in a comparable sector.
If successful it could increase the wages of 153,000 women working in community services.
But it has emerged that support for the case comes at a price. Payroll costs would rise by between 14 and 50 per cent if the case succeeds. The Australian Council of Social Services said non-profit groups could not meet these costs without more government funding.
The federal government's submission to Fair Work, lodged yesterday, argues the cost of a pay rise would be ''considerable'', and its plan to return the budget to surplus would limit its ability to meet the bill.
''If any additional government funding is provided, it would likely come at the expense of other government-funded services,'' the submission said. It argued Fair Work must balance equal pay for female community workers with the broader impact of rising wages - including cuts to services and jobs - and the economy.
Lin Hatfield Dodds, the national director of UnitingCare Australia, which has 35,000 staff, said ''the government is trying to walk away''.
A pay rise without extra funding would hurt programs for disability, domestic violence, aged care, homelessness and other services, she said.
The parliamentary secretary for workplace relations, Jacinta Collins, said it was a matter of striking ''the right balance between ensuring community workers are not undervalued … and considering the impact of a significant wage increase on services and the economy."
Governments provide $5.4 billion to the sector. The commonwealth contributes 47 per cent.