UPDATE 5.35pm: ABOUT 150,000 low-paid workers - mostly women - could get an average pay rise of $12,000 a year under a historic pay rise push backed today by Prime Minister Julia Gillard.

Ms Gillard announced the Government was prepared to spend a massive $2 billion over six years to deliver higher wages if it was approved by the industrial umpire, Fair Work Australia.

She called on the states to match the pledge, with Victorian Opposition Leader Daniel Andrews urging the Baillieu Government to support the push and uphold its pre-election commitments.

"It's still unclear what the Baillieu Government is going to do to deliver on its lofty statements of support for achieving pay equity in Victoria," Mr Andrews said.

Ms Gillard said the pay rises would go to under-paid social and community sector workers such as those working in disability, homeless and domestic violence areas.

"This is an important step on the road to closing the long-standing pay gap between men and women and delivering fairness to the workplace,'' Ms Gillard said.

She said about 120,000 of the 150,000 workers in the sector were women.

Ms Gillard said the average full-time wage in the sector was just over $46,000-a-year, compared with around $58,000 for all working Australians.

"A gender-driven pay gap which sees, for example, a disability support worker with a tertiary qualification who supervises five staff get paid less than $38,000-a-year.

"You have above-average qualifications, you get below-average pay,'' the PM told community workers at a conference in Sydney.

Ms Gillard said working women earned on average one-fifth less than men.

"It is as if women work nearly seven weeks every year for free,'' she said.

"For too long society has under-valued the work women do.''

Ms Gillard said if the pay rise was approved it would start from December 1 next year.

She gave the example of a person called Natalie who works with mentally ill, children and young people to help them live independently when they move from long-term hospital-based care to community-based living.

"Natalie is currently paid $41,648 per year. When fully implemented, her fair pay will be around $55,000 in today's dollars,'' the PM said.

She said another community worked named Michelle has a law degree and a degree in youth affairs and works full time at a community legal centre, managing the legal and financial counselling programs, supervising seven staff and numerous volunteers - as well as providing legal advice directly to clients. Her pay could rise from $49,500 to $66,000.

Ms Gillard said the pay rise would hit the Budget but the Government was making a choice about spending and the value of working women.

UnitingCare Australia welcomed the pledge but said it hoped the pay rise would not be paid for by cutting vital social services.

"People who work in community services are highly valued by those they care for, by families, communities and by their employers,'' said UnitingCare national director Lin Hatfield Dodds.

"For too long their wages have not matched the value of their contribution. The Government has shown real leadership on this issue and today's announcement is cause for optimism.''

Originally published as PM pledges $2b for pay rises