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Friday, 28 November 1986
Page: 3033

Senator WATSON(3.45) —At 11 o'clock this morning the Minister for Industry, Technology and Commerce (Senator Button) put out a Press release outlining in very brief form the future program of the textile, clothing and footwear industries. The Press release has the unfortunate title of `Revitalising Australia's Textiles, Clothing and Footwear Industries'. While it might be true that a number of firms will be revitalised, this plan will be the death knell for a significant number of them. For many industries this is a sad document. The new plan will come into operation on 1 March 1989. Although there are some incentives and carrots in it, there are some significant problems. The principal feature that enabled Senator Button to sell this plan to the industry, to the unions, to his back benchers and to others, I suppose was the creation of what is known as the Textile, Clothing and Footwear Development Authority. This Development Authority has the responsibility of directing the industry's development strategy and for monitoring the overall operation of the plan. A number of my questions asked during Question Time today, to which the Minister responded positively and affirmatively, concerned the adequacy of the resources that were given to that plan, and the fact that it should anticipate movements within the industry sectors. This is the linchpin and it is integral to the whole operation of the plan. Production can fall. I think it is generally recognised that the plan can work provided that this Development Authority works within the declared structure and according to the affirmations which the Minister gave today. Of course what the plan suggests will not be nearly as good as quotas, but at least it does provide a minimum floor.

Senator Button —What is good about quotas? Tell us what is good about quotas.

Senator WATSON —There are problems. In answer to the interjection I tell the Minister that the elimination of quotas must spell the demise of a number of firms. I would also like to suggest to Senator Button that, if this Authority is to work, the end point will never be achieved. I also think that the Government has to be sensitive to some of the movements, actions and consequences that could happen in what we call the sub-clauses category. For example, the shirt making industry may be devastated but the rest of the clothing industry might go along quite nicely. That is provided for within this Government plan. I believe that, should some of the serious consequences that this Authority could perceive happen, they must be acted upon quickly before there is blood on the floor and before there is a tremendous loss of employment.

I hope that the Minister will respond today and tell us about some of the types of regional assistance that are going to be needed. I come from a State in which much of the textile industry is decentralised, and I think we need to know what sort of assistance there will be, what sort of retraining will be needed and in which parts of the industry money will be injected. Will it be put into allied industries or other activities, such as cleaning up rivers and so on?

One of the problems that the industry is facing at the moment is that there is a need for it to see the printed word. So many undertakings have been given. There is a need for the Minister to flesh out, to put some flesh on the bare bones of what he has put forward today. We have already seen evidence that the Government is sensitive in a number of areas. I will cite just one example. Woven made fabric stays under quota for seven years without any expansion. I congratulate the Minister for his concession on that. That alone will provide relief to some mills which could otherwise suffer distress. There will be certain problems, for example, with the lifting of the lightweight fabric from 1.20 grams per square metre to 1.250 grams.

The whole program has been sold on the basis of this Development Authority. Unfortunately some areas in some States could be devastated as a result of this plan. Undoubtedly, some firms will use this as an excuse for putting into train other longer term plans. But, at the other end, if companies cannot see any future as a result, for example, of the elimination of the quotas and these end points, they will not hang around for four or five years until perhaps those end points are reached. They will cut off their proposed investment decisions fairly quickly. They will try to save as much as they can.

Other people who have looked at this a bit more charitably feel that this is perhaps as good a plan as anybody could get from the Australian Labor Party. But I would like to reiterate that the end point that the industry said that it could not live with was basically 75 per cent. People must wonder why the industry has accepted a plan involving not 75 per cent but 60 per cent. But, in effect, it is not 60 per cent because at least 95 per cent of imports come from developing countries. So in the clothing area the cut-off point will be 55 per cent and in the case of furnishing 45 per cent. I believe it will cause a lot of heartache not only in capital cities but more importantly in the decentralised areas. I call upon the Government to put forward its plans in those regional areas, to tell us what these packages are, to tell us what the areas of job creation will be and provide some examples of the circumstances in which money can be paid.

I believe there is a problem in providing funds to those companies which will probably do very well. While I applaud the provision of regional adjustment, I also applaud the Government's decision to assist the further onprocessing of natural fibres such as wool and cotton. We understand that similar studies will be initiated for the tanning industry. Of course, that should help firms in my State such as Blundstone Pty Ltd. A number of firms will be assisted by this industry efficiency program but, again, we need to know the type of assistance that will be offered. All the Press release states is that industries' efficiency will be stimulated by intensive assistance to a limited number of firms with demonstrated high potential to lift their competitiveness to a world class level. Many of the companies are already at that level. Of course, if they are to be given further assistance, that will hardly help those that are struggling. On the other hand, it will help those companies which have a shortage of working capital to establish markets overseas. But the whole thrust of this is dependent on the value and stability of the Australian dollar. If the dollar is not stable, there is not much incentive to export. Again, that is one of the limitations of the scheme. We will just have to wait and see the reaction of individual firms to this report but I know that in a number of areas the result will cause some heartbreak and sorrow.