Outlook for the TCF Manufacturing Sector Fact Sheet 

KEY POINTS

• The textile, clothing and footwear sector is diverse and covers a range of various different products including made-up textiles, clothing, carpet, footwear and technical textiles.
• The latest official statistics for the sector show that it contributes nearly $3 billion in industry value-added, which is around three per cent of all manufacturing value-added.
• In 2006–07, imports ($8.9 billion) were five times that of exports ($1.7 billion), up on the total manufacturing industry ratio of roughly 2:1.  
• Australia's TCF industry has faced significant pressures to adjust to ever increasing global competition.  Competition from Asia, in particular, has strongly affected the size and vitality of the industry over the last decade or so.
• The Government commissioned an independent broad-ranging review of the TCF industry which dovetailed into the Government's review of Australia's national innovation system.  
• The Review, announced on 8 March 2008, took account of the Government's commitment to ensuring that the TCF industry is well placed to benefit from new technologies and innovation, and to a globally competitive industry based on its strengths and capabilities.  Tariff reductions were held at current levels until the review was completed.
• The Review was conducted by Professor Roy Green, Dean of the Macquarie Graduate School of Management, in consultation with an industry reference group.
• The Productivity Commission was separately requested to undertake modelling on the economy-wide effects of future assistance options.  These results were released to the public and served to inform Prof. Green's examination of the industry.
• The TCF Review was publicly released on Friday, 19 September 2008.

FACTS AND FIGURES

Textile, Clothing and Footwear

 NA - Not available.  The latest data available for Business Expenditure on R&D is 2005-06.

¹ ABS Cat. No. 5204.0 – Australian System of National Accounts, 2006-07, Table 9 – chain volume measures.

²ABS Cat. No. 6291.0.55.003 – Labour Force, Australia, Detailed, Quarterly, Nov 2007, Table 06: Employed persons by Industry Subdivision and Sex – original data.  Employment is at November (i.e. 2006-07 is at November 2007).

³ ABS Cat. No. 5368.0 – International Trade in Goods and Services, Australia, Dec 2007, Table 32: Merchandise Trade: Exports By Industry, FOB Value.

⁴ ABS Cat. No. 5368.0 – International Trade in Goods and Services, Australia, Dec 2007, Table 35: Merchandise Trade: Imports By Industry, FOB Value.

⁵ ABS Cat. No. 5625.0 – Private New Capital Expenditure and Expected Expenditure, Australia, Sep 2007, Table 2E: Actual Capital Expenditure, Detailed Industries – Seasonally Adjusted Current Prices.

⁶ ABS Cat. No. 8104.0 – Research and Experimental Development, Businesses, Australia, 2005-06.

The textile, clothing and footwear industry is facing significant global competition and has been undergoing structural adjustment for some time.  Australian manufacturers have generally moved from producing commodity goods to manufacturing specialised higher value-add and niche market goods—i.e. specialised textiles for emergency and defence services.  This is reflected in the industry’s performance, with large declines in industry value added, employment and exports.  International developments, such as Free Trade Agreements, continue to present both opportunities and challenges for the sector. 

TCF Review

On 8 March 2008, the Government announced a comprehensive review of the Australian Textile, Clothing and Footwear (TCF) industries to be conducted by Professor Roy Green in consultation with an industry reference group.

Professor Green is the Dean of the Macquarie Graduate School of Management.

The Government separately requested that the Productivity Commission undertake modelling on economy-wide effects of future assistance options. The Commission's modelling has been released to the public and will serve to inform Professor Green's examination of the industry, public debate, and the Government's deliberations in this area.

Australia's TCF industries have faced increasing competitive pressures over the last decade. The Government is determined to work with the TCF sector to develop viable strategies for its long-term future.

The establishment of the Review was expected to provide renewed energy and enthusiasm across TCF industries.

The Review was consulted closely with all stakeholders in a thorough and considered way. Its task has been to develop practical and effective strategies to ensure Australia's TCF industries will be vibrant, innovative and competitive well into the future.

The Review took into account the changing nature of the industries in the TCF sector and assessed their current performance and prospects. It sought to ensure that TCF industries are able to take advantage of new technologies and new research and have the skills and strategies that are needed to compete in the global market place."

The issue of industry assistance has also been addressed.

The appropriateness and effectiveness of assistance provided to the industry have been examined, as has the existing structural adjustment assistance measures.

Professor Green was supported by an expert reference group made up of: 

• Mr Brian Rush - President of the Council of Textile and Fashion Industries Australia Limited, Chief Executive Officer of Australian Defence Apparel Limited; 
• Mr Phillip Butt - President of the Footwear Manufacturers' Association of Australia, and Managing Director of J Robins & Sons; 
• Professor Peter Forsyth - Department of Economics, Monash University; 
• Mr Rod McKenna - Chair of the Technical Textile and Nonwoven Association and Managing Director, TenCate Australia Pty Ltd; 
• Ms Michelle O'Neil - Incoming National Secretary, TCF Union of Australia; 
• Mr Barry Tubner - National President, TCF Union of Australia; 
• Dr Nigel Johnson - Chief, CSIRO Textile & Fibre Technology; and 
• Professor Suzi Vaughan - Head of Fashion, Queensland University of Technology.

The TCF Review ran concurrently with the Review of Australia's national innovation system and has regard to the issues raised in that Review.

On 8 April 2008, Professor Green called for submissions to provide views, insights and forward-thinking ideas to inform the Review.

Sitting fees for reference group members will be set according to standard Remuneration Tribunal scales.

Professor Green is a well known and well respected figure in industry policy and business management.

The Government received the Review's final report on 31 August 2008. The report was publicly released on 19 September 2008.

Terms of Reference

1. The Australian Government has commissioned Professor Roy Green to undertake a comprehensive review of the Australian textile, clothing and footwear (TCF) industries.

2. This review is to be conducted within the context of a concurrent broad-ranging review of Australia's national innovation system. It is to take account of the Australian Government's desire to:

a. ensure that there are no impediments to the TCF industries benefiting from new technologies and innovation;
b. foster globally competitive industries based on Australia's strengths and capabilities; and
c. optimise the overall economic performance of the Australian economy.

3.  The review will consult broadly among industry stakeholders and interested parties to examine and make recommendations in relation to:

a. the changing nature of the industries in the TCF sector and their current performance and prospects;
b. the scope for the industry to take advantage of research and development, new technologies and innovation in textiles and design, to build on its existing strengths and move into new areas where the sector can be competitive;
c. the sector's access to and use of government programs aimed at promoting innovation and productivity;
d. the future skills needs of the industries, current skill shortages and the availability and appropriateness of education, training and professional skills development opportunities within and for the sector;
e. the appropriateness and effectiveness of assistance provided through sector-specific assistance and trade measures, including current tariff rates and the reduction schedule;
f. any other issues that affect the competitiveness of the sector, including regulation, industry/research collaboration, and the need to address environmental challenges; and
g. the effectiveness of existing structural adjustment assistance in ensuring that:

i. the sector is able to take advantage of the future industry possibilities identified;
ii. an appropriate level of support is provided to better assist TCF workers to improve their English and language skills, engage in vocational education and training and find secure employment following redundancy; and
iii. regional impacts of structural change are appropriately addressed.

4. In examining these matters and making recommendations, the review will consider the broader economic environment and all issues affecting the sector, including:

a. the Australian TCF industries' competitive strengths and weaknesses;
b. the impact of global and domestic economic developments on the TCF industries;
c. the likely social impact of significant further industry adjustment, including the impact on TCF workers, regional Australia and the broader community;
d. the international trading environment, and opportunities for access to global markets and supply chains;
e. Australia's existing international trade obligations and the implications for Australia's current trade negotiations at the multilateral, regional and bilateral level;
f. the regulatory environment; and
g. the need to respond to the challenges of climate change and drought with environmentally sustainable practices.

5. The review is to present a final report to the Minister by 31 August 2008.