Date posted: 7/02/2019 10 min read

Gender pay gap proving tough to fix

Paying equal wages for equal work was made law half a century ago, so why are women CAs earning 72% of what male CAs do?

In Brief

  • Women employed full-time in Australia earned 14.6% less than men in full-time work. In New Zealand, the gender pay gap is 9.2%.
  • CA ANZ’s 2017 Remuneration Survey showed that female CAs in Australia earned 72% of what male CAs earned ($155,558 v $217,256). In New Zealand, they earned 71%, NZ$121,891 v $170,657.
  • An effective way to start closing the gender pay gap is by doing a pay audit.

By Chantelle Herro and Jo McKinnon

In August 2018, Australia’s Workplace Gender Equality Agency (WGEA) announced that the nation’s gender pay gap had shrunk to its lowest level in 20 years.

Women employed full-time in Australia earned 14.6% less than men in full-time work, a difference of A$244.80 per week, according to calculations using Average Weekly Earnings data released by the Australian Bureau of Statistics.

In New Zealand, the gender pay gap slimmed to 9.2% in 2018, the second-smallest gap since the series began 20 years ago, according to Stats NZ. (It was 9.1% in 2012.)

Alarmingly, that pay gap starts with women’s first jobs after graduation and can continue through their careers.

Australia’s 2018 Graduate Outcomes Survey found the median full-time salary for business and management graduates was A$60,000 for males, compared with A$55,500 for females – a A$4500 difference. . The gender pay gap for dentistry graduates was a startling A$24,000, with new male dentists pulling in A$102,000 annually compared with A$78,000 for their female colleagues.

“Do a pay gap analysis. Report the results to the executive and board. Pay gaps close when leaders see the numbers.”
Libby Lyons, Workplace Gender Equalty Agency

Gender pay gap among CAs

Women CAs in full-time work also earn less than their male counterparts. CA ANZ’s 2017 Remuneration Survey shows that, on average, female CAs in Australia earned 72% what male CAs earned ($155,558 v $217,256), and it was a similar case in New Zealand (71%, NZ$121,891 v $170,657).

Analysis by Colmar Brunton (which conducted the survey) identified two-thirds of the gap in Australia came from differences in roles and years of experience. In New Zealand, the comparable figure is nearly 75%.

In simple terms, accounting was a much more male-dominated sector of study 20 to 30 years ago, so the accountants who have worked their way up to senior positions today tend to be men.

But that still leaves one-third (Australia) to one-quarter (NZ) of the gender pay gap that can’t be explained by differences in roles and experiences.

At the time, the 2017 CA ANZ Remuneration Survey was released, Simon Grant FCA, CA ANZ’s head of members, said chartered accountants were aware of the pay gap and that there was some way to go before women held senior roles in proportion to their overall numbers.

“We’re committed to engaging with their profession to address the issues,” he said. “We have also committed to reporting for a Champions for Change initiative that focuses on reporting gender and cultural diversity.

“With our own board, we saw an increase in female representation from 36% to 50% and internally at a general leadership level from 34% to 58%.”

Equal pay is the law in Australia and New Zealand

But the question remains, why are we still talking about a gender pay gap at all? It’s nearly 60 years since the Government Service Equal Pay Act 1960 abolished gender-based pay scales in New Zealand’s public service. The principle of equal pay for equal work was extended to the private sector in 1972, to be introduced in five stages. By 1 April 1978, there would be one rate of pay for all workers employed in any one job, regardless of gender.

In Australia, it’s 50 years since the 1969 Equal Pay Case, where Australia’s Arbitration Commission judges accepted the principle of equal pay for equal work. Before that, Australian employers could legally pay women 75% of what they paid men for doing the same job.

How to fix the gender pay gap

In theory, women should be paid the same as men, so what’s stopping that happening? Research by KPMG shows the main factors contributing to the gender pay gap are:

  • discrimination and bias in hiring and pay decisions
  • women and men working in different industries and different jobs, with female-dominated industries and jobs attracting lower wages
  • women’s disproportionate share of unpaid caring and domestic work
  • lack of workplace flexibility to accommodate caring and other responsibilities, especially in senior roles
  • women’s greater time out of the workforce impacting career progression and opportunities.

WGEA’s director, Libby Lyons, suggests the first step to closing a gender pay gap is to do a gender pay audit.

“By collecting and analysing data, employers know where their gender equality hot spots are and can take action to improve them… Do a pay gap analysis,” she says. “Report the results to the executive and board. Pay gaps close when leaders see the numbers.

“If every employer in Australia did a pay audit, analysed the results and then took action, we would eventually consign the national gender pay gap to the annals of history.

“The gender pay gap is a symptom of a broader issue. It reflects the fact that women’s work is traditionally undervalued and women are often paid less than men. Average full-time salaries are lower for women than men in every occupation and industry in Australia.

“Women are under-represented in senior executive and management roles and female-dominated occupations and industries attract lower pay than male-dominated ones.”

Read more on what’s driving the gender pay gap with KPMG’s She’s Price(d)less: The economics of the gender pay gap.

Learn more

See the trends and surveys of the CA ANZ 2017 Remuneration Survey.

Read more

Use the Workplace Gender Equality Agency’s tools to identify and address a gender pay gap.

Read more