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Tuesday, 7 December 2004
Page: 77

Senator MURPHY (4:53 PM) —I want to make a brief contribution with respect to the Textile, Clothing and Footwear Strategic Investment Program Amendment (Post-2005 Scheme) Bill 2004 and the Customs Tariff Amendment (Textile, Clothing and Footwear Post-2005 Arrangements) Bill 2004. They are, of course, very important bills, particularly with regard to the strategic investment program funds. There are a couple of things that I want to raise, and I guess I will raise them further with the government when the bills reach the committee stage. They are matters that relate to the overall operation of the program. Of course, we know that there is a significant amount of money and it is very important for this industry to receive these funds to assist it both to adjust and to meet the continuing competitive pressures we are seeing in goods being brought in from overseas.

With regard to the competitive aspect, in the funding provided for in the bill it is interesting to note that there is little focus being given to the opportunities that can and do exist in export to overseas countries, particularly to countries like China. The government, through some agency such as Austrade, has a responsibility to ensure that industries such as the TCF industry are given great opportunity to maximise the opportunities that exist in exporting to overseas countries. Because they do exist. Often it is the case that individual companies have neither the expertise nor the financial capacity to make inroads into those markets.

In visits I have made to China, I have looked at the retailing of clothing and footwear in some of the major department stores in the big cities—that is, stores like David Jones or Myers here. You will see that a great deal of the clothing available on the retail racks there is far more expensive than it is here. These are name brands. We have an opportunity to actually create some name brands in this country to provide to people in those countries that can afford to pay money for imported clothes—indeed, that are in fact looking for imported clothing. They do not want to buy clothing manufactured within their own country. They are looking for something different. They are no different to people in other countries who want to buy something that somebody else has not got. I would have liked to see a bit of thought given in this package to how those sorts of markets can be accessed and further developed.

With regard to the structural adjustment program, I had a meeting with the Minister for Industry, Tourism and Resources on 22 June, at which I raised a number of concerns with him about certain aspects of the bills. In particular I raised concerns I had about the structural adjustment program, which was formerly known as the labour adjustment program, which ran from I think 1990 through to 1996. The minister responded in writing on 29 July. I would like to read his response to the chamber. He said this:

I would also like to clarify the assistance, which would be provided to displaced TCF workers under the proposed TCF Structural Adjustment Program (SAP). I share your view that this is a critical part of the package. The level of available funding for the TCF SAP is $50 million over ten years, nominally at $5 million per annum but with flexibility to shift any unspent monies in a particular year forward to subsequent years. This flexibility is required because it is highly likely that employment losses in the industry will be “lumpy” and unpredictable in nature.

The level of funding for the TCF SAP is commensurate with the best analysis of likely job losses in the industry. In its final report the PC—

the Productivity Commission—

quoted employment losses of up to 9,563 over the 15 year period from 2005 to 2020. This was based on the adoption of the PC's recommendations. This modelling has been subsequently updated to take account of the actual policy announced by the Government and the analysis concludes that employment losses will be 5,815.

The TCF SAP is intended to supplement rather than substitute for existing assistance. The Government, via Job Network, has in place a national network of private and community organisations dedicated to finding jobs for unemployed people. Most retrenched TCF workers would be eligible for Job Network services but some may not be fully eligible (for example those who do not qualify for income support due to working spouses or do not pass the income and asset test).

The TCF SAP will broaden Job Network to take account of the particular needs of retrenched TCF workers, who tend to be mature aged and from non-English speaking backgrounds. The TCF SAP will enable retrenched TCF workers to obtain immediate access to Intensive Support customised assistance, irrespective of whether or not the retrenched TCF worker would otherwise be eligible for Job Network services. In normal circumstances a job seeker would have to wait up to 12 months to receive this support. This means that retrenched TCF workers will receive substantial and individually tailored employment assistance as well as access to complementary employment and training programs and to a supplemented Job Seeker account. The range of complementary employment and training programs includes appropriate vocational and preparatory job training, and language skill courses.

This program contrasts markedly with the TCF Labour Adjustment Program (LAP) that operated from 1990 to 1996 and was predominantly focused on assisting people in Melbourne and Sydney. Under the TCF LAP there were strict eligibility requirements that meant benefits could only be accessed if a retrenched TCF worker had worked 24 out of the previous 36 months in the TCF industry, and support was only available for 12 months. Additionally, as you noted in our meeting, workers were not allowed to return to the TCF industry. There will be no such restrictions under TCF SAP.

I believe the combination of TCF SAP and the existing Job Network structure has the capacity to more greatly improve the job prospects of retrenched TCF workers than a revamp of the former TCF LAP.

I appreciate the minister's explanation but it still leaves the concern I have. The previous program had its problems: a significant amount of money was expended and a great deal of it did not deliver any real outcome. That is why it is so important that this particular program gets it right.

I expressed concern to the minister with regard to union involvement. There seems to be no clear plan to have a group of people who will look at what previously worked under the LAP, because there were some things that did work. I urge the government and the minister to include the relevant trade union, the TCFUA, at the table to ensure that the things that did work are implemented. It is important that the people on the ground representing those workers, who understand better than most the needs of those workers, be included in the process.

As far as job losses are concerned, the minister in his letter stated with respect to the government's analysis that the modelling had been subsequently updated. The Productivity Commission in its report referred to the loss of 9,563 jobs, and the analysis of the updated modelling concluded that this figure would be reduced to 5,815. That represents a significant difference. I will be interested to hear from the government during the committee stage what happens if the figure is higher than 5,815. What happens if the figure is 7,000 or 10,000? What funding will be made available and how will it be made available?

I believe there are many questions that remain unanswered at the moment. I would have thought that the opposition, in looking to approve this legislation, would have been more mindful of this aspect of the package and would have pursued the issue more strongly than it seems to have done. It should have tried to put in place a clearer and more concise approach to how we will deal with workers who are displaced as a result of the proposed changes.

On the occasions when I met with industry representatives they raised with me that they are yet to be advised about how the package will work. We assume—and I think the minister says, in effect—that the program will work as it has previously. I think the industry would be interested to know—they may know by now; I have not heard that they know—what the eligible expenditure, the five per cent total eligible revenue, will comprise.

Those are the questions I would like to ask when we get to the committee stage. I hope the government will respond by giving some answers that are clearer than the answers I have received so far from the minister. The package does need to be passed because it is important that companies that have been receiving assistance be able to commence their forward planning. It is probably a little unfortunate that this issue was not dealt with earlier.

The other important matter involves the structural adjustment package. It would be very useful if we were able to say what specific types of programs will be involved. Given that we have already had experience of this from 1990 to 1996, we ought to be able to say, `Yes, this is how we will deal with the issue of English language training; this is how we will deal with employment retraining; these are the sorts of areas that we will focus on.' I cannot understand why some more concise explanation cannot be given regarding these issues. It would be very helpful if that could occur when we reach the committee stage.