Tariff cuts threaten tcf industry

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Tariff cuts threaten tcf industry

The Australian Business Chamber’s submission to the Productivity Commission’s inquiry into the Textile, Clothing and Footwear industry (TCF) has warned that the industry could disappear completely if tariffs are reduced beyond the year 2000.

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The Australian Business Chamber’s submission to the Productivity Commission’s inquiry into the Textile, Clothing and Footwear industry (TCF) has warned that the industry could disappear completely if tariffs are reduced beyond the year 2000.

The submission highlights the grim reduction in total employment in the TCF sector which has fallen from about 124,000 in 1984 to a current level of about 100,000. Despite this decline, the TCF industry still accounts for 10% of all manufacturing employment in Australia.

A TCF Industry Study contained in the submission shows that of all TCF workers retrenched in 10 centres since 1991, less than 15% had found re-employment in the TCF sector and more than 53% had dropped out of employment altogether. As a result, the cost to government in retraining programmes, pensions and unemployment benefits negates any real benefits identified by the Industry Commission in cheaper goods brought into Australia as the result of the industry being restructured.

The Chamber’s submission points out that while TCF exports have improved, more value-adding needs to be encouraged in Australia. Since 1992/93, only yarn and fabric exports have increased, while exports of clothing have remained virtually static and footwear exports have declined.

The Chamber has recommended a freeze on TCF tariffs at year 2000 rates until 2005 when the scope for further reductions can be reviewed. In addition, the Chamber has recommended that TCF tariffs:

  • must considered in the context of their impact on employment;
  • be made subject to better delivery of micro-economic, labour and tax reform;
  • become part of an integrated, whole of government national industry policy; and,
  • be related to the progress in reductions in trade barriers by our trading partners.
 
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