Textile Clothing & Footwear Union of Australia
TCF Industry Package 2009 – 2010 Federal Budget Background Information
For union comment on the Budget please contact: Michele O’Neil, TCFUA National Secretary, 0419 338 853
w w w . M a k e I t H e r e . c o m . a u
1
Background During the Howard Government’s watch, the TCF industry experienced: Over 40,000 Australian TCF jobs loses Five tariff cuts since the late 1990s with another due in 2010 so that TCF industries are less protected A halving of TCF exports with imports almost doubling Four Free Trade Agreements that have hurt Australian manufacturing with nine more in the pipeline Under the Rudd Government: 1850 clothing jobs will go at Pacific Brands when the largest manufacturer in Australia moves offshore Further job losses at Huyck (150); Melba (170); Brintons (over 100) Millions of dollars lost in workers’ entitlements, for example at Melba, $9million FTA with ASEAN has been concluded and progression toward an FTA with China is advanced 9 months have passed since the receipt by Government of the TCF Review Report without Government response or action to support the industry. TCF Review Report A Federal Government Review of the textile, clothing and footwear industry was conducted last year by Professor Roy Green. Professor Green handed his Report to Government in August 2008. No response to the Report has been made until the 2009-2010 Budget. He made 15 Recommendations for the TCF industry, including:
2
Total Government assistance be provided in the amount of $250million from 2009- 2015 The establishment of the TCF Innovation Capability Program (TCF ICP) with a budget of $200million– to support the development of innovative capability through funding to companies o Eligibility criteria include: value-adding to the Australian economy, ethical production and supply chain standards, additionality of program funding, employee involvement in change projects and accountability for delivery of project aims The continuation of funding for retrenched workers (TCF SAP (part 1)) with a budget of $25million. Other o establishment of a TCF Innovation Council- $12million o introduction of an Australian Ethical Quality Mark- $8 million o formulation of a National Sizing Standard- $5million Government procurement to support local industry Tariff reductions to proceed
TCFUA Response Total funding is grossly inadequate. $184million per year is needed to ensure the viability of the industry The timeframe for assistance is too short and longer term planning and parallel commitment is necessary to fully maximise the potential benefits from the TCF plan. Government assistance should run until 2020
3
Funding to companies must be conditional upon ongoing local manufacturing, transparent supply chains and labour standards which are able to be audited by TCFUA Government procurement must be immediate and agencies must abide by effective procurement policies which support local industry Funding for retrenched workers (TCF-SAP) of $25 million constitutes a significant reduction- current program promised $50million over 10 years. We seek an amount of $50million. No further tariff reductions Combined Industry Letter On 19 February 2009 the TCF industry wrote to the Government to express its concerns with the Recommendations of the Green Review. Please see a copy of the letter below.
Senator the Hon Kim Carr Minister for Innovation Industry Science and Research Parliament House Canberra, ACT, 2600 Dear Minister, We wish to advise that since your kind invitation to meet with you and your Department in Canberra on 2nd February we have come together to determine consensus on many of the TCF Review recommendations. The organizations agree that: the post 2010 TCF package requires a global funding allocation of at least $150 million a year the new package should operate for at least a 5 year period the main focus of the post 2010 program should be innovation, environmental sustainability and ethical manufacturing
4
the provision of company assistance should be directly linked to the manufacture in Australia of TCF products in the interests of supporting Australian jobs and investment Government departments and agencies should be directed to purchase Australian made TCF products a more effective program to assist redundant TCF workers is required a TCF Innovation Council of senior industry and union representatives should be established to directly advise the minister the Industry Associations and TCFUA will work with Senator Carr’s Department to develop appropriate eligibility criteria for company assistance.
We seek an urgent meeting with you to discuss the combined position and we have also written to the PM, Deputy PM, Treasurer, Ministers for Finance and Trade with the same request. Yours sincerely Australian Association of Leather Industries (AALI); John Menzies ph 0418 434 022 Carpet Institute of Australia Ltd (CIAL); Allan Firth ph (03) 9804 5559 Council of Textile and Fashion Industries of Australia (TFIA); Jo Kellock ph (03) 8680 9400 Footwear Manufacturers Association of Australia (FMAA); Peter Eames ph (03) 98944033 Technical Textiles and Nonwoven Association (TTNA); Kerryn Caulfield ph (03) 9866 5442 Textile, Clothing & Footwear Union of Australia (TCFUA); Michele O’Neil ph (03) 9639 2955
Automotive Industry A Federal review of the Automotive Industry was conducted in 2008. The Report was handed to government in July 2008, made public in August 2008 and the Government response announced in November 2008. Government funding of $6.2 billion from 2008- 2021 The automotive industry employs over 64,000 people. This is less than TCF when the informal sector is accounted for. $42billion stimulus package
5
$14.7 billion to be invested in school infrastructure and maintenance and bringing forward funding for trade training centres; $6.6 billion for to increase the national stock of public and community housing by about 20,000; $3.9 billion to provide free insulation to 2.7 million homes and solar hot water rebates; $890 million to fix regional roads and blackspots, to install railway boom gates and for regional and local government infrastructure. $76billion infrastructure spending - October 2008 $26 billion for road and rail $20 billion for Building Australia fund $5 billion for broadband $15 billion Education Investment fund $11 billion Heath and Hospitals fund
6
Howard Government’s TCF Plan (Current program) The TCF Post-2005 Assistance Package The $747 million TCF Post-2005 Assistance Package comprised two legislated five year tariff pauses and six programs designed to increase the international competiveness of Australia’s TCF industries through increased investment in innovation, research and development and in regional Australia. The policy objective of the Package was to foster the development of Australian TCF manufacturing activity so that is viable and internationally competitive without continued special assistance. The rate of scheduled tariff reductions set by the Howard Government is: 2004 25% 15% 10% 15% 15% 10% 5% 2005 17.5% 10.0% 7.5% 10.0% 10.0% 7.5% 5.0% 2010 10.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 2015 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
Clothing and Finished textiles Cotton sheeting and fabrics Sleeping bags, table linen Carpet Footwear Footwear parts Other (eg yarns, leather)
7
Comparison of current and proposed TCF Industry Programs:
Current program
Proposed program 6 years (20092015)
Difference
Timeframe
10 years (20052015)
Total assistance
$747million
$250million
Funding to companies for innovation and development Support for retrenched workers
$600million
$200million
$50million
$25million
Reduction of Government commitment by 4 years Reduction in current of $49.7million per annum in assistance Reduction of $26.7million per annum in funding available to companies Reduction of $900,000 per annum
8