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Textile, Clothing, Footwear & Carpet Industries

Hon Jim Anderton, 10 December 2003

Government works with Textile, Clothing, Footwear and Carpet Industry

"The textiles and clothing sector is being given time to adjust to new tariff levels and the government is investigating how to assist the industry in the transition period," Economic Development Minister Jim Anderton said today at the launch of Textiles New Zealand.

He announced that the government is committing $200,000 to help establish 'Textiles NZ', an industry wide organisation, which will give leadership and strategic direction to the TCFC industry. The Government will also work closely with Textiles New Zealand on a wider package of industry assistance measures.

Jim Anderton says there are 17,900 jobs in the TCFC industry.

"We have given priority for local manufacturers to have time to adjust business strategies to meet increased competition. And we are investigating how to assist the industry through the transition period.

"Decisions have been made in the past both in New Zealand and in other countries that inevitably affect us in New Zealand. We need to adapt. It's better to manage change than to resist it until it was too late, and then have it imposed on us by market forces.

"Tariff cuts are not cost-free. There can be a real risk of losing production and employment among manufacturers competing with cheap imports.

"I well remember the decision to end tariffs on imported cars in 1998. Overnight the government lost $300 million in revenue. Thousands of jobs were lost ? in places like Porirua and Thames. Instead of buying cheaper cars and transferring the savings to alternative New Zealand production, New Zealanders bought even more expensive cars. As a result the current account ? our account with the rest of the world ? blew out. It contributed to the 1998 recession. In other words, it helped to cost tens of thousands of jobs further down the line. It also cost high-tech investment in the economy. Of course, if you could afford a BMW, you probably thought that the decision was a good one.

"We needed to learn from that fiasco and avoid repeating it in the TCF industry. Jobs and people are too important to just throw an entire industry on the scrapheap," Jim Anderton said.

The TCFC strategy, drawn up in partnership with the government, aims for annual export growth of 12.8 per cent and sales of a billion dollars a year. In the last five years, the TCFC sector's exports have more than doubled, from $208 million to $439 million.

www.progressive.org.nz

Full speech available at: http://www.beehive.govt.nz/ViewDocument.cfm?DocumentID=18603

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