Swan got it right claim industry leaders

NATIONAL: The fractured textile, clothing and footwear (TCF) sector looks set to enjoy a new lease on life as a result of measures announced in Wayne Swan's federal budget last week.

The funding allocated in the document, delivered on May 12, promised a total of $401 million to the TCF sector over the 2009/10 to 2015/16 period.

The news has been received favourably by most industry commentators with all but the Textile Clothing and Footwear Union of Australia (TCFUA) claiming it marked an important turning point for the apparel and footwear industries.

The package, unique to this sector, has been designed to help support wholesalers and manufacturers through to 2015 when the general tariff rate - currently sitting at 17.5 per cent for clothing and finished textiles and 10 per cent for footwear - is reduced to a flat five per cent.

Driven largely by recommendations made by Professor Roy Green in his sweeping review of the Australian TCF climate conducted last year, the Rudd government has earmarked $22.5 million per year for five years to establish a new Clothing and Household Textile Building Innovative Capability Program (BIC). The modulated BIC program, to be introduced in the 2011/12 financial year, will replace the current TCF Post-2005 Strategic Investment Program (SIP) and Product Diversification Schemes.

Funding of $30 million has also been set aside for a new competitive TCF Strategic Capability Program. The contestable grants program, which will commence in the 2010/11 financial year, has been designed to support projects - valued over $1 million - that will "build innovative capability" at an enterprise and workplace level.

To the relief of many, the budget also allocated funding of $2.5 million per year for five years to retain the existing TCF Small Business Program. The program, whose fourth funding round is due to be announced shortly, provides grants of up to $50,000 to improve the business enterprise culture of TCF small businesses - or those whose annual turnover is less than $2 million.

Other highlights include simplified research and development tax concessions, an allocation of $5 million per year to continue the existing TCF Structural Adjustment Program to help retrenched workers and an agreement to "re-energise" mechanisms ensuring local manufacturers have an equal opportunity to tender for government and private sector procurement.

The government has also lent its support, in principle only, to the establishment of a TCF Industries Innovation Council and commitments to examine a new voluntary Australian Ethical Quality Mark and new Australian National Sizing Standards.

The head of industry body the Council of Textile and Fashion Industries of Australia (TFIA), Jo Kellock, said there were a lot of positives to be drawn from the budget announcement with nearly all of the TFIA's platforms catered for within the document. Kellock said the $55 million put towards innovation was particularly pleasing as it allowed TCF firms access to a large range of R&D grants.

With things now settled from an economic standpoint, this meant the industry could not settle its differences and focus on promoting itself as a unique entity both at home and abroad, she said.

"We now have a new diversified industry that looks very different to what the traditional sector looked like. It's up to us now to brand that and take it out there into the main street press and promote our industry."

While Australian Retailers Association was among those applauding the new initiatives in regards to small to medium-sized enterprises (SMEs), TCFUA national secretary Michele O'Neil said she believed the industry had been short-changed by the government - both in terms of allotted funds and time.

"I think the very low amount of money allocated to the industry means that even though some of the policy announcements and programs have merit in them, it's such a small amount of money. Overall I think the industry loses and the message it gives [the sector] from government is that it values it far less than it does other industries."

TCF Services managing director Gerry Frittmann said while it was inevitable some in the sector would complain that the level of government support should continue beyond the allocated time frame, this was unfeasible.

"There has to be a time when the government tit stops. The level of the industry has contracted so much in the past 20 years and the TCF industry doesn't have the workforce to continue to argue for sectoral assistance over and above other industries. I would tend to think, from a taxpayers point of view, they've had a bloody good run."

The TFIA is running a series of half-day workshops across Melbourne and Sydney aimed at explaining the implications of the package with the first taking place in Sydney on May 26.