Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

As announced in the budget, the government has identified savings from the 2015-16 funding allocation of two programs aimed at the textile, clothing and footwear, or TCF, industry. Those two programs are:

These two programs are legislated under the Textile, Clothing and Footwear Investment and Innovation Programs Act 1999. To facilitate the identified savings, the government proposes a number of changes to the act through the Textile, Clothing and Footwear Investment and Innovation Programs Amendment Bill 2014.

Government funding support has been provided to the TCF manufacturing industry for many years. The TCF Small Business Program (obviously aimed at small businesses) and the BIC Scheme (aimed at medium to large businesses) were created to help the TCF manufacturing industry transition to a lower import tariff regime. TCF tariffs have been lowered in stages over many years. The tariff on clothing is now 10 per cent and this will fall to five per cent on 1 January 2015. The tariff on textiles and footwear is already at five per cent. There are no plans for further reductions. In many cases these tariffs are already effectively further reduced by the range of trade agreements Australia is a party to and by concessions provided to some trading partners which qualify under developing country status.

The TCF Small Business Program is a competitive, merit-based grants program that aims to improve the business enterprise culture of established TCF businesses that have not received grants or qualify for assistance from other TCF programs. Grants of up to a maximum of $50,000 have been available for eligible projects. The program is based on annual rounds with $2.5 million allocated for each round. Round 9 of the TCF Small Business Program (for which applications are currently being assessed) will be the final round of this program. Grants made under round 9 would be funded from the 2014-15 funding allocation.

The BIC Scheme is aimed at fostering the development of a sustainable and internationally competitive clothing and household textile manufacturing and design industry in Australia, by providing grants, available on an entitlement basis, for research and development including innovative product design activities, innovative process improvements, market research and some industrial property rights expenditure. Grant payments are made in arrears for eligible activities conducted in the previous financial year. The BIC Scheme registrants have already spent substantial funds in 2013-14, in the expectation that much of this will be reimbursed in 2014-15. After making such reimbursements in 2014-15 no further grant payments would be made under the scheme.

Passage of the bill by 30 June 2014 would close the TCF Small Business Program and the BIC Scheme one year earlier than originally intended. Therefore the amendments detailed in the bill are essentially the bringing forward of end dates by one year and the reduction of the total of grants paid under both the TCF Small Business Program and the BIC Scheme, combined, by $25 million.

The details and requirements of the TCF Small Business Program are provided for by the legislative instrument, Textile, Clothing and Footwear Small Business Program Determination 2005. This instrument will be amended to reflect the legislative amendments to be made by the bill for the closure of the TCF Small Business Program.

The details and requirements of the BIC Scheme are provided for by the legislative instrument, Clothing and Household Textile (Building Innovative Capability) Scheme 2010. This instrument will be amended to reflect the legislative amendments to be made by the bill for the earlier termination of the BIC Scheme.

I commend the bill to the House.

Debate adjourned.