Australia currently grows more wool than any other country yet most of that fibre leaves unprocessed, with the real value added overseas rather than at home. For decades, local spinning and finishing facilities have closed as cheaper offshore options and the removal of textile tariffs in the 1980s shifted the industry’s centre of gravity. The result is a sector that still produces the raw material but misses out on much of the economic benefit that comes from turning it into finished fabric and clothing.
The new National Manufacturing Strategy for Australian Fashion and Textiles, developed by the Australian Fashion Council with support from a major heritage bootmaker, aims to change that equation by focusing on modern onshore processing instead of trying to recreate the factory model of the past. Economic modelling from a leading university suggests that rebuilding parts of the supply chain could add about $2.6 billion a year to the sector’s revenue and more than $1.4 billion in wages if Australia can capture more of the spinning, finishing and manufacturing steps that now happen offshore. The strategy runs for 10 years and has financial backing for at least the next two years, and it closely aligns with the federal government’s push for more products to be made domestically.
A core part of the plan looks to increase demand specifically for Australian-made textiles and garments, including through government procurement settings that are similar to rules used in the United States for uniforms. Industry consultations with more than 300 participants across every state highlighted that even if the technology and demand are there, the sector lacks enough trained people to do the work. Skills such as sewing, pleating and specialist tasks like buttonholing were once widely passed down through families and small workshops but now exist in only a handful of places, so manufacturers cannot scale without investment in training and apprenticeships.
The challenges are clear in the story of one 75-year-old knitting mill in South Australia, recently rescued from liquidation by new owners who raised around $1 million to buy and revive the business. As one of only about 10 knitting mills left nationwide, it now produces sportswear, school uniforms and government clothing and has begun supplying leading fashion labels as well as collaborating with the strategy’s industry partner. The mill runs modern equipment that can knit jumpers in a matter of hours with minimal human intervention, showing that with updated machinery and steady orders, local production can be both efficient and competitive, though that requires sustained demand and capital.
The broader vision is to position Australia as a leader in high-quality, traceable, ethically produced textiles rather than a low-cost manufacturing hub. The strategy draws on initiatives such as Italy’s “Made in Italy” program, which uses tools like blockchain tracking and dedicated national funds worth around €700 million in 2023 and another €300 million in 2024 to strengthen local production and brand value. For Australia, success appears to depend on government purchasing policies, consumer appetite for locally made products, access to advanced machinery and the rebuilding of specialist skills, all at the same time. If those pieces come together, the country could keep far more of the value of its wool at home and establish a distinctive place in the global fashion supply chain, although the outcome still hinges on long-term political will and industry collaboration.
