BY SUE BOLTON
Representatives of the Textile, Clothing and Footwear Union of Australia (TCFUA) couldn't believe their ears at a meeting in Canberra when a young technocrat from the Productivity Commission blandly told them, "We might just have to lose a generation of textile workers". The young technocrat could have been talking about rearranging the paper clips on his desk, for all the emotion he showed when making this statement.
The Productivity Commission is currently conducting an inquiry into the level of tariffs in the textile, clothing and footwear (TCF) industries. An interim report was released on April 16. The final report will be handed to the government on July 31, with a government decision expected in November.
TCFUA members in Victoria will protest outside the first public hearing of the Productivity Commission in Melbourne on June 3. Bus-loads of members will come from all over Victoria, including Wangaratta, Geelong, Ballarat and Stawell.
The TCFUA is concerned about the recommendation in the Productivity Commission's interim report for tariffs to be cut from the current level of 10-25% to 5% for most TCF products by 2010.
The next round of legislated tariff cuts is due in 2005 when the tariff for clothing will drop from 25% to 17.5%, the rate for fabrics, carpet and footwear will fall from 15% to 10%, and the tariff on sleeping bags, table linen and footwear parts will drop from 10% to 7.5%.
What happens after that is being decided by the Productivity Commission's current inquiry. The interim report declares that the Productivity Commission's "preferred tariff option at this stage, would maintain all TCF tariffs at the new legislated 2005 levels until 2010, then reduce most of them to 5% and maintaining that rate until at least 2015". However, tariffs on clothing and certain finished textiles, which are currently much higher than those on other TCF products, would not be reduced to 5% until 2015.
To "facilitate adjustment to these tariff reductions", the interim report proposes that "transitional (Strategic Investment Program-style) budgetary support be extended for a further eight years, but with funding levels reducing over time".
The current TCF Strategic Investment Program Scheme (SIPS) is a $678 million, five-year federal government package which is due to end in mid-2005.
Federal industry minister Ian Macfarlane was reported in the April 30 Melbourne Age as saying that SIPS would be dumped in favour of a new scheme that would pick companies which were judged to be strong enough to survive in the long-term without government help and reward them with funding.
The interim report warns that the $9 billion TCF sector, which employs about 65,000 workers, could be almost obliterated by low-cost offshore competition within a decade, regardless of future tariff levels.
The clothing tariff has dropped drastically from 130% in 1986 to 25% in 2001. This 80% drop was accompanied by employment levels halving from 116,000 workers to 58,500.
Workers in the industry have suffered from a massive number of factory closures and job losses as manufacturers have moved their operations overseas or shut up shop altogether. In Victoria alone, the TCFUA has tracked the closure of more than 570 businesses, and witnessed the massive transfer of clothing industry jobs from factories into home-based outworking.
The Productivity Commission estimates that in 2000-01 TCF firms provided factory-based employment for at least 58,000 people, with around 25,000 full-time employees engaged in outwork.
Nearly 5000 of the 27,000 TCF jobs in Victoria are located in the regional areas such as Geelong, Ballarat, Bendigo, Traralgon, Wangaratta, and Wodonga. In Geelong, the TCF industries employ more than 2150 people directly and a further 2838 indirectly, accounting for 4.2% of Geelong's total manufacturing work force.
The TCFUA submission notes that clothing and footwear production in Australia is highly labour intensive, with limited scope for more automation. As in other developed countries, high unit labour costs mean that Australian TCF firms have a competitive disadvantage in producing standardised clothing and footwear items.
Government bureaucrats and politicians often argue that when "inefficient" factories close down retrenched TCF workers will just move on to other employment.
In their book, Refashioning the Rag Trade: Internationalising Australia's Textiles, Clothing and Footwear Industries, authors Michael Webber and Sally Weller (UNSW Press, 2001) reported on a study they made on the employment effects of tariff reductions in the TCF sector. Of the 605 workers in their sample, more than a third were never employed again.
With 59% of TCF workers being women, 41% coming from non-English speaking backgrounds, 74% having no formal qualifications and 66% being over the age of 35, it is difficult for retrenched TCF workers, especially in regional areas, to find permanent work again.
Women TCF workers have borne the brunt of job losses in the industry with full-time female jobs decreasing from 67,000 to 37,000 between 1985 and 2002. Male full-time jobs in the industry decreased from 37,000 to 31,000 in the same period.
In its submission, the TCFUA argued that:
- tariff rates for the TCF sector should remain at current 2003 levels;
- the government enact a scheme which requires employers to ensure that 100% of all employee entitlements are secured and protected; and
- the government amend the Corporations Act 2001 to vary the order of priority of payment to creditors in the case of insolvency to place employees before secured creditors.
The TCFUA also called on the federal government to provide workplace English language and literacy programs that involve integrated language, literacy, numeracy and vocational skills to TCF outworkers in each state, and to re-introduce the TCF Labour Adjustments Program with the following features:
- two years of training for workers who have been made redundant;
- integrated training for workers with language, literacy and numeracy needs;
- a wage during training;
- no means testing for access to training; and
- a wage subsidy to employers who take on redundant TCF workers.
The TCFUA expressed strong support for the continuation of government direct assistance to the TCF sector which has a direct link between payment of government funds and employment of Australian workers until at least 2015.
However, the TCFUA recognises that companies which receive government funding don't necessarily use that money to fund jobs. According to its submission, the TCFUA's "major concern with SIPS is that there is no linkage between a company receiving government funds and their commitment to maintaining or increasing their level of employment. Companies can receive taxpayer funds to assist their businesses one day and sack workers the next."
Some aspects of SIPS even encourage sackings, such as the SIPS grants for new plant and equipment. "There is nothing in the scheme", according to the TCFUA submission, "that encourages employers to maintain or expand employment other than a general hope that the scheme will result in the business growing and as a consequence employ more workers."
Despite calling for no further cuts in tariffs on the Australian industry, the TCFUA submission criticises the tariff barriers which textile, clothing, footwear and leather (TCFL) companies in Australia face when they attempt to export.
The TCFUA submission refers to a TCFL report which uses the footwear industry as an example of the tariff barriers that Australian TCFL firms face. For example, footwear that has a protective metal toe-cap attracts a tariff of 60% when it enters Japan, 50% in Vietnam, 40% in Thailand and Papua New Guinea and 30% in Malaysia and South Africa. A different work-boot that also has a protective metal toecap attracts a tariff of 37.5% when entering the US.
The conclusion which can be drawn from the detailed information in the TCFUA submission to the Productivity Commission is that while tariffs and direct government assistance to TCF companies might guarantee profits, they certainly don't guarantee jobs.
It is only when the TCFUA has been prepared to put up a fight that it has managed to save jobs, win retraining schemes, win improved redundancy payments and force companies to pay workers their entitlements.
From Â鶹´«Ã½ Weekly, June 4, 2003.
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