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Textile, clothing industry in good shape, say -

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(generated from captions) is the dis may about Blundstone's move

offshore. That report from Matt Peacock. The news about

Blundstone's move offshore

comes as the Federal Government

prepares to unveil its new

industry policy, which is

expected to retain assistance

for the textile clothing and

footwear sector and the car

makers. I spoke to the Federal Industry Minister Ian

Macfarlane in Brisbane earlier

today. Minister, is this a sad

day for Australian

manufacturing? Well, it's a sad

day for the employees of

Blundstone, but Australian

manufacturing in general is

actually running at record

levels with also record profits

and record capital investments.

So whilst there are sectors

that are feeling the pressure

of international competition,

such as the TCF industry,

manufacturing in Australia is

generally doing well. Before we

look at manufacturing

generally, when did you find

out that Blundstone was going to shut down manufacturing in

this country? Well, I found out

yesterday afternoon via my

press office who had been given

a request from the media. There

had been no prior consultations by the company and having

discussed the issue with the

company today, they were

emphatic they were not seeking

government assistance and they

had made this decision based on

the knowledge that it was their

decision. But they've received

government assistance in the

past, as you've said yourself

millions of taxpayers' dollars

have gone to them. Would yul

have expect ped to have heard

earlier in The decisions by the

company are their decisions. I

would assume they accepted

those taxpayer dollars in good

faith and this decision has

only been recently arrived at.

Whilst I am disappointed, my

concerns are now primarily for

the employees of the company

and I've activated our intense

support mechanism for them,

both to re-train them and also

to seek out new job opportunities for the

employees. Is this proof that

government assistance has

failed millions of dollars, but

bottom line, it hasn't made any

difference? No, it is not

proof. In every program you are

going to have failures, but

we've also had significant

successes and other companies

within the footwear industry have in fact used the

Government's assistance to not only expand their markets here

in Australia and also expand

operations and seek out markets

overseas. To expand their

ranges and based on a premium

product, continue to grow their

business. You talk about other sectors that have growen

business and industry and

manufacturing in general being

very strong, but Steve Gunn,

the CEO of Blundstone, said

today that we're not the first

Australian manufacturer to make

this call and "I don't believe

manufacturing in Australia is a

sensible investment option".

That's a pretty damning

assessment, isn't it? Well,

that's Steve's view. It is

independent a view that I share

and certainly not a view that's

backed up by the sheer facts

and statistics. Parts of

manufacturing in Australia are

doing exceptionally well and

parts are like the TCF industry

are under enormous pressure.

The problem with the TCF

industry is not unique to

Australia. It is being faced

everywhere in the world where

wages in modern economies are

up to ten types that that we

would see in South-East Asia,

so in an industry like TCF

where the labour component is

high and there is not a lot of

room for mechanision then the

TCF industry is groove tating

to South-East Asia but there

are companies within that

industry that are competing on

the basis of quality product

and reputation and brand. But

if manufacturing is so strong,

minister, why have we lost

70,000 jobs-plus in the last 10

years? Well, we may have lost

70,000 jobs, and I don't have

that figure in one area, but if

you look at the term of the

Howard Government we've created

over 2 million jobs and we have

currently a record low

unemployment in Australia. So,

some industries are mechanising

to meet the competition of low

wages overseas. Other

industries are changing their

foeng cause. If you look at the

economy as a whole, as you

must, you are seeing that in

fact Australia's economy is doing very well and

unemployment is at record low

levels. But you said we can't have a sound Australian economy

without having a strong

manufacturing base and if we

look just at manufacturing,

70,000 jobs have been lost,

according to the Bureau of

Statistics in the past 10

years, regardless of what jobs

have been created elsewhere,

does that really mean that we

have a strong manufacturing

industry? Well, the bottom line

to a manufacturing industry is

over all production and

profits. And overall production

is at record levels,

approaching $100 million and

profits are at record levels.

As well as that, you are seeing

record levels of investment. I

would say the manufacturing

sector is responding to the

competition that's coming in

general and that overall the

manufacturing sector is in good

shape. So if it's all so well

and solid and travelling in a

good way, why do we need a new industry policy which you're on

the verge of announcing? Well

of coursely there are parts of

industry and manufacturing that

are facing challenges in the

future and we shouldn't be

complacent in terms of where we

position industry for the next decade. Australian industry does face challenges in the

future, not the lease of which

are our continuing high dollar

and high wage levels. Those

issues are good for the economy

and good for the average

Australian. But it means that

we have to ensure that industry

policy in Australia is keeping

pace with the changes in the

global market. That's part of

the challenge that lies ahead

for industry and in particular

ensuring that they get a share

of the export opportunities

that are out there. So how do

we compete? If you look at what

business wants, it is looking

for more consession on research

and development and it is

looking for a lower company tax

rate, it is looking for more

incentives to develop export

markets. How do we compete? P

what else can you do? Well,

companies compete by being

innovative and producing

quality product, but in terms

of how industry competes

globally, then obviously the

whole basis to it is to have a

sound economy in the first

place and this government has

provided them not only with a

very sound economy, but the

confidence to invest in the

future and those processes

along with continue ed

collaboration, cooperation with

the Government will see

industry continue to be a very

important part of our overall

economy. But there is going to

be a new industry policy. What

will it include? Are you

prepared to consider more tax

consession, more

incentives? Can I say that I'll

be introducing an industry

policy that will ensure that

industry will be positioned for

the future, but at this stage

I'm not prepared to announce

the detail. Ian Macfarlane, many thanks #230r your