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Bonds Industries, Wentworthville, Sydney, 10 September 1997: transcript of press conference


Well, ladies and gentlemen I welcome you to this news conference and I'm

delighted to be joined by the Minister for Industry and also by

representatives of the textile, clothing and footwear industry - Mr Robert

Hershon and representatives, Mr Boyd of the Textiles Unions and also Mr

Ross Cameron, who is the Federal Member for Parramatta in whose electorate

a large number of the employees of this factory reside.

I'm pleased to announce that the Government has reached a decision in

response to the Industry Commission report. It is a decision that will

promote jobs security, investment and a long-term competitive future for

the textile, clothing and footwear industry. It will help to develop

internationally competitive textiles, clothing, leather and footwear

industries in Australia. It is designed to assist in securing jobs in the

industry and it does provide a practical transition designed to promote

innovation and investment.

The key features of the package agreed upon by Federal Cabinet yesterday

are that the current schedule for TCF tariff phasing will continue through

to the year 2000. TCF tariffs will be held at their 2000 levels from the

1st July 2000 until the 1st January 2005.

The Government will introduce legislation to provide that in 2005 the

tariffs will reduce in the clothing and textile area from 25% down to 17.5%

and there will be some adjustments of a similar proportion in the other

areas, but the levels that will be reached in the year 2000 will be

maintained until the year 2005 and that breathing space will enable a

period of investment and consolidation and strengthening for the industry.

I will enable it to focus on those areas which it does best. It will

enable it to focus on export development and export expansion.

In the year 2005 there will be a further inquiry, it won't be a total

industry inquiry, rather it will be a inquiry directed towards assessing

issues such as market access and the behaviour of other developed countries

in relation to the assistance given to their textile, clothing and footwear

industries. I should make it clear that we will introduce legislation in

the current session of Parliament to give effect to the decisions that I am

announcing today.

As well as the decisions taken in relation to the actual level of the

tariff in the various sectors of the overall industry, we have decided on a

number of other quite important measures which will be of direct benefit to

the industry. We're going to establish a TCF investment programme designed

to build globally competitive capacity in the industry. We will establish

a $10 million TCF Technology Development Fund and it will provide $10

million for a National Centre of Excellence for TCF training.

We'll establish a new market development programme with funding $2.5

million a year to develop and implement firm based strategies to increase

export capabilities. There will be an expanded overseas assembly programme

to enable increased use of Australian textiles. We will examine removal of

anomalies in TCF by-laws and tariff concessions, and as I have already

indicated there will be a further review of the type that I have described

in the year 2005.

We remain committed to a resolute but sensible programme of tariff reform.

This decision is consonant both with providing job security in the

industry, encouraging new investment, but also with an eye to the trade

liberalisation goals of APEC by the year 2010. This should be seen as a

decision which maintains the pressure for and the process of tariff reform

and developing a greater outward orientation of Australian industry. But

we have to understand the textile, clothing and footwear industry has gone

through an enormous amount of change over the last few years and it is

worth reminding us that in the year 1990, apparel and certain finished

textiles carried a tariff level of 55%. By the year 2000 it will carry a

tariff level of 25% under what I have announced today. After maintaining

the 25% for a period of 5 years it will have in the year 2005 a tariff

level of 17.5%, which represents half of what it is in 1997, as I speak to

you today.

It is important when looking at this decision the enormous pressure for

change and rationalisation to which the industry has already been subjected

and I think it is important in any fair assessment of what the Government

has announced today that that be understood.

This is a very good decision for the battlers of Australia. It is a

decision which is designed to give people a greater sense of job security.

It is designed and I know it will bring forth new investment and I believe

that, as a consequence of this decision, we can look forward to hundreds of

millions of dollars of additional investment in the industry over the next

few years. We need in this country to maintain the process towards

liberalisation. We need to maintain the process and progress towards

tariff and industry reform, but we have to do it at a pace and in

circumstances which take proper account of the capacity of an industry to

sensibly adjust and this industry has already absorbed enormous change and

enormous adjustment.

It is modernised. There are many features of this that I am speaking to

you today which are leading edge technology by any definition in the

industry and it is important that we put in place a policy that is going to

promote that and I regard this as a very progressive policy that has been

announced today, but also a very sensible policy which will give to the

workers in the textile, clothing and footwear industry a greater sense of


It is a very good decision for them, it's a decision that recognises the

understanding and sensitivity of my government towards the battlers of

Australia and it is a decision which understands the importance of giving

an industry that has already undertaken enormous amount of change, and it's

already sustained and absorbed an enormous amount of consolidation, it will

give to that industry a deserved breathing space before further tariff

reductions occur which they will be legislated to occur in the year 2005.

I think it is a decision that will be widely welcomed by all but the

extremely doctrinaire in the Australian community on these issues. It's a

decision that will be seen by both the industry and the workers of textile,

clothing and footwear as a resolute but sensible decision which certainly

matches the national interest of Australia in 1997.

JOURNALIST: Did you read the Industry Commission Report before (inaudible)

PRIME MINISTER: I had the report and I read the overview and I also read other sections of

the report and all Ministers have that material before them.

JRNLST: The normal process of government is that the officials look at it, there

are inter-departmental committees. The report cost a million dollars. Was

it money wasted?

PRIME MINISTER: No it wasn't money wasted but I think, with respect, any suggestion that

this thing hasn't been kicked around for a long time is really quite wrong.

This industry has been hanging on tenterhooks now for months and I think

it deserves a prompt response from the Government and it has received a

prompt response. We got the report yesterday and we've taken the decision

and we're announcing it today and I think there is a limit to the amount of

delay and public scrutiny and uncertainty that any industry and its vast

workforce can be asked to put up with.

This industry has been the subject of very rigorous public inquiry as will

be revealed in the recommendations that are attached to my press release.

Two of the Commissioners recommended essentially in accordance with the

recommendations of the majority in the draft report. The other

Commissioner, Mr Brass, recommended in favour of a pause until the year

2005. He also recommended in favour of some other additional financial

systems which have gone beyond what we believe was appropriate so we have

neither fully embraced the majority recommendations nor in that matter, the

minority recommendations.

We were well aware of what the options were. Senior Ministers were fully

apprised of what the options were likely to be before the final report was

delivered and I can assure you that the decision was taken by the Cabinet

in the full knowledge of all of the recommendations and having been for

months and months presented by the industry, by the unions, and can I say

in both cases in a very measured and understandable way. I have the

benefit of two lengthy discussions with groups from the unions and from the

industry. They were concerned about their jobs, they were worried about

the future of their industry and I think they took a measured case. I was

also in receipt of views from others in the community who thought that we

should adopt these majority recommendations and we took a very balanced

and, may I say, fully informed decision.

I don't regard the inquiry process as being a waste of money but I do have

to say that any suggestion that the thing hasn't been subjected to a lot of

detailed scrutiny and that the industry hasn't been put through the wringer

over a long period of months is ridiculous.

JRNLST: Has this been welcomed by the Treasurer as well?

PRIME MINISTER: This is a Government decision and he, like every other Minister, strongly

supports it.

JRNLST: Mr Howard, (inaudible)

PRIME MINISTER: This decision will create job security in the industry. It will result in

jobs being saved in the industry. It will result in new investment.

Whether and to what extent that new investment generates additional jobs

that exist in the industry, for those that exist in the industry now is not

something that I can quantify because it's impossible for anybody in my

position to do this. I have no doubt in the world that if the majority

report of the Commission had been accepted, there would have been a larger

and faster rate of job loss in the textile, clothing and footwear industry

than would otherwise be the case.

JRNLST: Mr Howard, what's your message to the other 80 - 85% of Australian

manufacturers which are being asked to compete in the increasingly global

marketplace without the high protection levels that your Government has now

afforded both the TCF and automotive industries? (inaudible) decision by

Cabinet last night?

PRIME MINISTER: Can I just point out to you that when the full effect of this decision

works its way through in 2005 the average level of protection in the

textile, clothing and footwear industry will be 13% and when you think of

what the nominal and effective rates of protection in the industry were ten

years ago, it has always been the case, in every developed country that

you've had two or three industries whose peaks of protection have obviously

been higher than the general manufacturing average.

Now in that sense, Australia is no different from the United States, no

different from the countries of Western Europe and I just invite you again

to contemplate the huge reductions in tariffs that have occurred. I mean,

to some extent, people are engaging in a doctrinaire debate over a very

diminished level of tariff protection but the decisions involve enormous

confidence effects in an industry.

You can never remove the psychological element of how an economy performs.

You can't just look at an economy in terms of numbers and models and

calculated outcomes. You've got to look at it in terms of confidence

effect and the confidence effect of this in the industry and I believe

throughout manufacturing generally will be very positive and if you're

worried about the view of the manufacturing industry, then I suggest, the

generality of the manufacturing industry, you might like to go and talk to

Mr Paterson of the ACCI who made a statement yesterday expressing a view.

You might like to go and talk to the Metal Trades Industry Association.

You might like to talk to some of the other bodies that represent the

generality of manufacturing industry in Australia.

JRNLST: The polls around at the moment say that jobs, or security of jobs are the

number one priority of the electorate at the moment. How much was the

government's decision influenced by the polls?

PRIME MINISTER: Well I haven't been influenced by them. I've had a view about the

importance of giving people job security for a very long time. I don't

need a poll or any advise from anybody to tell me, the Prime Minister of

this country, how important a job is to the people, how important it is to

their family and the idea that you sort of read opinion polls to work out

how intensely people feel about job security is ridiculous. I think the

prospects for employment in Australia are getting brighter every month. I

believe that this decision will contribute towards a growing sense of

confidence that as we move into 1998 we will see employment growth in


We have tackled the fundamental weaknesses of the economy that we

inherited. We've got the budget deficit down. We've got low inflation,

we've got falling interest rates, we've now cleared the decks in relation

to two major industry policy decisions concerning motor vehicles, textile

clothing and footwear. We'll get increased investment in both of those

industries. You've already seen it announced in the motor vehicle industry

and I believe as we go into the next year you will see a strengthening

employment outlook and I speak with growing confidence about the employment

outlook in Australia into the new year.

JRNLST: What guarantee can you give to any textile workers again about their job


PRIME MINISTER: I can guarantee that this decision will give them greater security, greater

hopes and a greater sense of stability for themselves and their family than

if we had adopted the majority recommendation of the Industry Commission.

JRNLST: Five years down the track you're going to legislate for that cut. Do you

think you will get that legislation through the Senate?

PRIME MINISTER: I will be perfectly astonished if the Labor Party and the minor parties in

the Senate sabotage a package which will give job security, predictability

and bring forth new investment in such a labour-intensive industry.

JRNLST: Do you think they'd get the tariff cuts through the Senate?

PRIME MINISTER: Well I can only repeat, Peter, I will be astonished if the Labor Party

tries to detonate this package.

JRNLST: Mr Howard, you referred to, you said it wouldn't be welcome by the

(Inaudible). Are you referring to Commission there?

PRIME MINISTER: No I am just using a turn of phrase which I think is appropriate.

JRNLST: You've used it twice and given that...

PRIME MINISTER: It doesn't really matter how many times I use it. Look, I am not attacking

anybody. I am simply making the view, expressing the view that this

decision will be seen by the Australian community as a resolute, sensible,

practical, commonsense decision. That is what they want. They want from

their Government resolution and we've done it by speedily responding. They

want a continued move towards the export orientation of Australian industry

but they also want some sensitivity for the strain that the pace of change

imposes on industry. This industry has copped an enormous amount of

change, an enormous amount of restructuring. Its employees have had to cop

it and I think the decision that we've taken strikes the right balance.

JRNLST: It's going to be pretty hard for Alexander Downer and Tim Fischer, though,

to sell the message that Australia is limiting (inaudible) increasingly in

the global market place, Mr Howard, given this decision and the automotive


PRIME MINISTER: I don't think so at all.

JRNLST: (inaudible) Do you think they will?

PRIME MINISTER: No I don't and I will tell you why it won't, because when you look at our

record on trade liberalisation, we are up there with the best.

JRNLST: ... five year freeze?

PRIME MINISTER: Look, by the year 2005, the Americans and the Europeans will still have

quotas. Now they have a commitment to get rid of those quotas but I am not

aware that it is a legislated commitment and if the Americans and the

Europeans still keep their quotas, I hope they don't, and they have

undertaken internationally not to, but I am not aware that it is

legislated, then their effective rates of protection, if they keep them,

will be higher than ours will be in textiles, clothing and footwear. So

what people have got to understand about this trade liberalisation process

is that when you are talking about international comparisons, Australia is

up there with the best.

Now you can have an argument about the unilateral benefits that might

accrue from this or that change domestically but if you're asking me to

say, how will Tim Fischer or Alexander Downer, or John Howard, for that

matter - because I will be going to the APEC meeting in Vancouver in

November - how I will argue this decision on an international forum. I

will do it with ease and alacrity because when you compare us with the rest

of the world, we are up there with the best.

JRNLST: Prime Minister, given the Government's decision today, will you now be

going to companies like Gloweave and Berlei and encouraging them to stay in


PRIME MINISTER: I was quite astonished at the announcement that Gloweave made yesterday. I

would hope they would look at that again and....

JRNLST: (inaudible)

PRIME MINISTER: I am doing it now. I am answering your question. I am sure it will get

reported, I think given what we have done, and I am really quite surprised

that companies, knowing that we were about to take a decision on this,

knowing that I had said that we would take a speedy decision, I am just

surprised that some of those decisions were taken before the Government's

announcement has been made.

Now at the end of the day, they have to make judgements about their

investment. They have to make judgements about their resources and their

shareholders and all of that sort of thing but I am surprised that some of

those announcements were made, given that this announcement was so imminent.

JRNLST: Some of those companies, I understand are asking for a reintroduction of


PRIME MINISTER: Well we're not going to do that. That's absolutely off the board.

JRNLST: Is that a rock solid guarantee on investments, Mr Howard?

PRIME MINISTER: The question of investments from individual companies is something that

those companies can no doubt talk about themselves.

Thank you.