TFIA: PC report misses the mark

MELBOURNE: The industry's peak body has lambasted economic modelling deployed in a report by the Productivity Commission (PC) for inaccurately outlining the TCF sector's needs.

Jo Kellock, head of the Council of Textile and Fashion Industries of Australia (TFIA) claimed the report - titled 'Economy-wide Effects of Future TCF Assistance' - used economic modelling "based on a number of assumptions that in some cases are too simple and in other cases are simply incorrect".

The Productivity Commission has stated the gains for the Australian community can be achieved under the current program of assistance reductions, involving the reduction in tariffs to five per cent and the removal of subsidies by 2015.

As previously reported in Ragtrader some leading retailers argued they would benefit from the lower prices and improved cash flow from tariff reductions - countering strong concerns expressed by onshore manufacturers.
However, the report's conclusion that only four per cent of TCF employees would be displaced in the long term underestimated the scale of the problem, Kellock said.

"The Productivity Commission is basing this judgement on the growth of the economy in recent years and does not seem to have taken into account the higher average age of TCF workers or the lower language skills that past studies have proven this sector to possess."

Furthermore the report appeared to have "completely ignored" the role played by outworkers, who were unlikely to find opportunities in the new jobs generated in the PC's modelling.

In narrowly defining its terms, the report also risked scaring away new TCF investment, she warned, as it could undermine budgetary support thus far provided through government schemes such as Strategic Investment Program (SIP). It had also failed to recognise the linkages between the TCF sector and other sectors.

"For instance it is estimated that boutique retailers account for 20 per cent of businesses operating in the retail sector. These companies rely heavily on the domestic TCF sector to supply them with small runs of product in very short time frames, needs that simply cannot be satisfied through offshore manufacturing."

TFIA members who played key roles in the supply of uniforms to the Australian emergency services and defence sectors were also concerned about the impact a potential loss of skills would have on the manufacture of clothing for specifically Australian purposes such as fire fighting, she said.

By Belinda Smart