Gender Equality Targets Stir Quota Debate

Australia’s latest gender equality targets aim to boost diversity in the workplace, but they could compromise merit and add red tape for large companies. While the Workplace Gender Equality Agency (WGEA) frames these rules as aspirational, critics argue they resemble mandatory quotas and risk hindering competitive excellence in the name of equity.

Under current legislation, businesses with over 500 employees must now set gender targets across areas like executive roles, pay and flexible work. Companies missing the targets may lose access to government contracts over $80,000 and be publicly disclosed. Although not officially quotas, these requirements are raising concerns about how far businesses can go before merit takes a back seat.

The WGEA was established to promote gender equality without overriding merit-based hiring, and it has long maintained a non-compulsory approach. But recent changes suggest a shift. Now, companies are "required" to undertake gender pay gap analyses and formally report on progress. That added layer of obligation fuels the argument that these targets act as quotas in disguise.

The broader concern is the economic impact. Australia now leads globally with legislated gender targets for companies, yet key European and American markets haven’t gone that far. There's fear this move could hamper Australian firms competing internationally - whether it's banks expanding overseas or exporters navigating global trade policies.

Some business groups support the reforms for levelling the playing field, especially for those already committed to DEI (diversity, equity, inclusion) practices. But others want accountability, including a formal evaluation within two to three years to assess real-world business outcomes. Without strong evidence of benefit, pressure may mount to restructure or even abolish WGEA as part of broader economic reform.

Source: Australian Financial Review, GC Legal, HR Leader