If a successful equal remuneration order is not followed by funding increases to cover higher wage costs, Australia’s social, community and disability sector workers will be expected to trade off decent wages for the stated priority of returning the national economy to surplus.

This objective appears to be of equal weight to the federal government’s mantra of “fair work” in an important test case currently before Fair Work Australia.

The Commonwealth’s submission presented last week urged Fair Work to consider the cost implications of a pay rise along with the principle of pay equity.

For a sector whose workforce is 85% women, this implies that gender pay equity is secondary to fiscal surplus.

The submission cautioned that any pay rise needed to be balanced with the impact on the budget, and ‘would likely come at the expense of other government funded services.’

For a sector whose workers have long offset their terms and conditions in the interests of services for their clients this news has evoked a great deal of outrage.

It comes despite Labor’s support of the case in the run-up to the federal election when the then workplace relations minister Julia Gillard signed an agreement with the Australian Services Union.

It would also appear at odds with Labor’s commitment to gender equality overall.

Nobody argues that achieving pay equity for community workers does not have a financial cost.

Although they did not give an actual commitment to fund the pay increase, this should have been clear to the federal government from the outset.

The hard reality is that the community sector has been routinely underfunded for decades with workers in the field receiving far less for doing equal or comparable jobs as those in male-dominated sectors.

Never mind the threat to the budget bottom line. The real threat is to the lives of the hundreds and thousands of people who depend on community groups every day. Community sector workers run services and programs that are the backbone of many communities and they provide vital support to some of the most disadvantaged and vulnerable Australians.

The cost of not addressing this pay inequity will be felt in services that cannot continue because community organisations cannot attract and retain the vital staff they need.

The Productivity Commission last year found that the not-for-profit sector makes up about 8% of employment and contributed just under $43 billion to Australia’s GDP in 2006-07. Yet it has been routinely underfunded, including by governments who pay only 70% of the value of the work that they contract out to the sector.

The Fair Work Act broke new ground when it provided the opportunity to test pay in relation to equal or comparable work. As pay inequalities stem from the social values we attribute to work, so too gendered pay gaps are the product of an undervaluing of women’s work, in terms of its content and the fact that women do it.

The new federal industrial relations landscape has, for the first time, the capacity to recognise that social injustice; and to do something about it.

Equal pay claims are brought when the pay levels of a workforce do not accord with the skills, responsibilities and experience required for their jobs. This case is not about increasing the salaries of child-care workers to the level of merchant bankers, as has been suggested in the SMH on November 22.

On the contrary, it is about addressing the social injustice that sees social workers employed in government roles earning $30,000-$40,000 more than those doing the same or similar work in the community sector.

More importantly, this claim is based on the fact that workers in the community sector have been historically undervalued because of the perception that it is care work and, often, women’s work.

The government has baulked at the inevitable cost decent pay will have on the funding purse. But here are the real costs of pay inequality. Community workers live on incomes that mean they face poverty in their retirement, rendering them eligible for their own services.

People seeking support to return to employment, to care for families on inadequate income levels, to deal with homelessness, mental illness or family violence, are unable to get that support because services simply can’t get recruit good staff.

Communities reach breaking point as the care and support demands of their members outstrip the available supply, because Australia has run its social services into the ground.

Equal pay is about wage justice. Equal pay for community sector workers goes one step further, ensuring the futures of our children, our families and our communities.

This case for community sector workers started out as a test case of the new Fair Work provisions for equal pay. It was to be a major leap forward in efforts to close the gender pay gap.

It may well become a litmus test for the values of the Australian government.  Are we a nation that values fairness and equality? Or are we a nation prepared to ask some of our most dedicated, hard-working people, mostly women, to trade off their own economic security in the interests of their clients …  again.

*Dr Cassandra Goldie, CEO, Australian Council of Social Service and Marilyn Forsythe, president, Business and Professional Women Australia.