The Australian Fashion Council (AFC) has asked Canberra for a modest sum of $5 million to reposition fashion as a strategic industry.
In its pre-Budget 2026/27 submission, the AFC laid out its strategy, confirming the funding will be spread across three key areas: $2 million for Fashion Week, another $2 million for sovereign manufacturing capability and $1 million to improve industry readiness for sustainability, traceability and compliance.
Regarding the first, the Council said the $2 million towards Fashion Week will help enable sustained export growth and trade diversification for Australia’s fashion and textile sector through a “nationally significant trade platform” that adds to existing investments.
In early January, the AFC confirmed it joined Austrade’s Trade Diversification Network (TDN), which is part of the Australian Government’s $50 million Accessing New Markets Initiative (ANMI).
“As a time-limited surge program, the TDN has played a critical role in accelerating export capability and building momentum for Australian fashion and textile businesses,” the AFC wrote in its submission. “With the industry already generating $7.2 billion in annual export revenue, the opportunity now is to build on this momentum by strengthening enduring export capability that supports sustained growth beyond individual funding cycles.
“For a highly trade-exposed industry operating in volatile global conditions - including supply-chain disruption, shifting trade policy and evolving compliance regimes - export success cannot rely solely on episodic or market-specific interventions. It requires nationally significant platforms that enable continuous, agile market engagement, buyer access and diversification over time.”
“Australian Fashion Week (AFW) provides this capability.”
The AFC has yet to unveil the 2026 AFW program. In an email to members, AFC executive chair Marianne Perkovic confirmed the fashion event will be held from May 11 to 15 in Sydney, with details to be shared shortly.
Another $2 million is being asked to help rebuild and modernise Australia’s fashion and textile manufacturing capability by “activating demand, lifting productivity and enabling targeted co-investment in skills, technology and scale.” The AFC noted this is consistent with its National Manufacturing Strategy, launched last year alongside bootmaker R.M.Williams, and with the Department of Industry, Science and Resources’ Future Made in Australia objectives.
“Australia’s clothing, textiles and footwear (TCF) manufacturing base has stabilised and remains economically material, contributing approximately $2.6 billion annually, employing 28,000+ workers, and paying over $1.4 billion in wages,” the AFC reported. “Women comprise 53 per cent of the workforce.
“Independent analysis commissioned by the Australian Fashion Council indicates that every $1 million of fashion and textile production that is commercially viable to on-shore could generate approximately $1.2 million in economic return, underscoring the productivity and value-add potential of targeted manufacturing capability uplift where market conditions allow.”
The AFC and R.M.Williams’ consultation revealed three constraints on capability rebuild, including demand uncertainty (including government procurements), investment barriers and policy fragmentation. On the last, the AFC noted that short-term programs do not compound into sustained capability.
“The National Manufacturing Strategy for Fashion & Textiles (2026 - 2036) responds to this evidence through a ten-year, industry-led roadmap focused on demand activation, skills, technology adoption and value-chain rebuilding,” the AFC noted. “The remaining gap is implementation capacity to shift the Strategy from publication to delivery.”
As for the final $1 million, the objective here is to build market capability and infrastructure required to support sustainability, traceability and competitive neutrality in Australia’s fashion and textile sector, while preparing industry and government for the introduction of global Digital Product Passport (DPP) regimes, and evolving trade and compliance requirements.
The AFC pointed out that Europe has launched its own DPP framework.
“These systems are increasingly shaping market access, buyer confidence and regulatory compliance in major export destinations,” the AFC noted. “At the same time, Australia’s domestic market is experiencing rapid growth in ultra-fast fashion imports sold directly to consumers via offshore digital platforms.
“These products frequently enter the market with limited transparency on origin, materials, labour standards or environmental impact, creating a growing regulatory and cost asymmetry for Australian businesses that are investing in compliance, traceability and sustainability systems.
“This creates a growing competitive imbalance between compliant Australian businesses and offshore ultra-fast platforms operating outside equivalent transparency and cost frameworks.”
The AFC warned that without share market infrastructure, this asymmetry risks disadvantaging compliant Australian brands and manufacturers, undermining sustainability and modern slavery policy objectives, and weakening the effectiveness of investment in domestic manufacturing and export capability.
“Market and regulatory capability is therefore a foundational enabler for both export growth and sovereign manufacturing, not a standalone policy objective.”
But the AFC’s proposal comes as industry lobby groups call for the government to rein in spending, which is believed to be keeping inflation elevated.
Australian Industry Group is one of a few lobby organisations calling for this. Ai Group’s CEO Innes Willox said it should be a top priority.
"The Reserve Bank of Australia's decision to raise the cash rate to 3.85 per cent is unfortunate but unavoidable,” Willox said. “The inflationary outbreak of late 2025 is clearly broad-based and has given the RBA little choice but to act.
"Of equal concern are the worrying forecasts issued today by the RBA. Inflation is expected to keep rising until mid-2026, economic growth is forecast to slowly slump back towards 1.6 per cent p.a., while real wages face another year of decline due to high inflation.
“Given current business and broader economic conditions, further rate rises unfortunately can't be ruled out.”