Formed in 1978 after a seminar was held at Melbourne University entited "Prostitution and the Law." From this seminar, a group of women continued to meet and eventually formalized their alliance into a group called the Prostitutes Action Group. PAG used a "ground-up" approach at formulating their mission and goals: they began by contacting many women who worked in prostitution, emphasizing information on working conditions, why women worked sex work, police harrasement, and what they thought would be the best legislative action.

PAG changed its name to Hetairae because women did not like to be identified as prostitutes. Hetairae was a Greek name for well-respected and powerful prostitute women.

In 1983, the Australian Prostitutes Collective (APC) was formed in Melbourne. Around the same time, a similar prostitutes rights organization was established in Sydney.

In March of 1988, the A.P.C. changed its name to the Victorian Prostitutes Collective.

The name Prostitutes Collective was adopted early in 1988, and it is the only prostitution-representative organization in the world that has government funding. It has pioneered the Safe House Scheme, bringing health education and resources directly to workers. They also run one of the busiest needle exchanges in the world, as well as street outreach.

The projects of the PCV are based on peer education, which relies on empowering the people the projects are aimed at and also relies upon the participation of the sex workers.

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