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Button criticises handling of spinning plant closure

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The Minister for Industry, Technology and Commerce, Senator John Button, today criticised the way a cotton spinning company had handled the closure of a plant at Kotara, near Newcastle, NSW.

Senator Button said the company, Rocklea Spinning Mills Pty Ltd, should have consulted fully with the unions and explained why Kotara has to close. Rocklea today officially took over the plant which was previously owned by National Textiles, part of

the Linter Group.

The Minister said the Kotara plant could not have been saved in the restructuring of the cotton spinning industry.

"The truth of the matter is that Kotara is an old, outdated plant and whatever the Government did, I believe it would have closed at some stage.

"This is the end result of the previous owner's failure year after year to invest in the plant and its future.

"That said, Rocklea has handled this appallingly".

Senator Button supported criticisms of the company by the Federal Secretary of the Clothing and Allied Trade Union, Ms Anna Booth.

"If the company had been willing to sit down and consult with the unions on its restructuring plans and explain why Kotara has to close I am sure they would have reached an understanding", he said.

"Officials of the union were informed by the company of its plans in February. Anna Booth was not informed - she was not in her present position at that time. However, there should have been further consultation with the union in more recent times.

"The bottom line in this is that a company receiving support from the taxpayer has a responsibility to consult openly about its plans."

Senator Button said the cotton spinning industry in Australia had no tariffs but was supported by protection bounties. Under an agreement with the Government, Rocklea will give up future bounties

totalling $22M. in return for a $15.9M. Bounty Capitalisation Grant. This had been agreed before the announcement on Kotara.

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In future, the Government would insist that any company getting a similar grant would have to sit down and consult with the unions.

"I have told Government officials this has to happen. We will make it a condition of future grants," Senator Button said.

"I did not believe that any company in this day and age would have even considered doing what Rocklea has done without full and open consultation."

The Minister said the $15.9M grant to Rocklea would be invested in the industry, in restructuring a key segment of cotton textile manufacturing, and improving its international competitiveness.

"It's only with restructuring that we are going to maintain a viable cotton spinning industry with long-term sustainable jobs," he said.

"I know this does not help those people in Newcastle who won't have their jobs next year, but I have to say that those jobs at Kotara were not sustainable in the long term. The plant was just not viable.

"It's a condition of the grant that the company must replace the spinning capacity lost at Kotara elsewhere and must invest the money in new plant and equipment.

"That will mean some jobs elsewhere - unfortunately not at Newcastle. If the company does not meet these obligations then it will be required to repay the grant in full."

Enquiries: Mike Roberts (03) 650 9873