What the Productivity Commission’s report signals for the future of clothing circularity

The Productivity Commission has submitted its final inquiry report, Australia’s circular economy: unlocking the opportunities, to Jim Chalmers, Treasurer of Australia, which will be tabled in Federal Parliament in the coming weeks.

The inquiry report takes a clear, evidence-based view of Australia’s slow but growing shift to a circular economy, with textiles firmly in the spotlight as a priority sector. It identifies and addresses key costs and barriers and applies a framework for prioritising reforms where economic, environmental and social benefits are greatest. ‍

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Practical recommendations create accountability for textiles stewardship

The report sets out practical recommendations, from stronger product stewardship regulation for high-risk and high-value materials, to policies and investment that boost demand for recycled content and lift design standards. It also calls for deeper collaboration and capacity-building across governments, industry and communities.

Many of the suggestions and proposed solutions outlined in the Seamless response to the Productivity Commission’s interim report have been reflected in this report.

Importantly, the report introduces stronger accountability for textile stewardship. This creates a narrow window for our industry to show real, measurable progress. It’s a chance to work together on an industry-led, whole-of-life stewardship model that ensures every clothing brand makes a fair and responsible contribution to Australia’s circular clothing textiles economy.

Government is being urged to move quickly

The key recommendations for textiles are to:

1. Establish criteria and timelines for assessing industry progress and publish conditions for considering regulatory intervention within the next six months.

2. Introduce enhanced monitoring, public reporting and transparency measures, including periodic statements of progress against performance targets. This includes listing all brands and retailers who are members and non-members of voluntary arrangements.

3. In the next two years, commission and complete an examination and cost-benefit analysis of regulatory models and complementary measures, such as import standards, to inform a viable regulated path forward.

4. By the third year, introduce a regulated product stewardship framework, if a viable regulatory model can be developed and voluntary arrangements do not meet defined expectations.

Circular economy requires leadership and a whole of life approach

Production, processing and disposal of clothing and textiles can have negative effects on the environment and human health, and the report details these. This is consistent with the Seamless Environmental Impact of the Australian Clothing Industry 2024, which provides a national estimate of the greenhouse gas emissions and water use generated across the clothing value chain.

The report makes it clear that the Australian Government will have a growing role in circular economy policy, as attention shifts beyond waste and recycling. It also calls for greater action earlier in the product life cycle. This aligns with Australia’s Circular Economy Framework: Doubling our circularity rate 2024, which emphasises national leadership to reduce material use and environmental impact across the entire life cycle.

Reinforcing Seamless priorities

The inquiry report reinforces the 2026 priorities set by the Seamless Board to:

1. Establish the evidence base for a national clothing system
2. Advocate for mandatory participation in Seamless, an industry-led scheme 
3. Foster engagement with Seamless and collaboration across the clothing value chain

From recommendations to action

Over the next three months, we’ll work closely with Seamless members, supporters and the wider industry to inform our program to support a coordinated national system for clothing collection, sorting, reuse and recycling in Australia. This program received grant funding from the Australian Government to help drive industry collaboration, increase clothing recirculation and unlock new markets for recycled textiles.

Alongside this, Seamless will:

Support the Australian Government to set ambitious but achievable performance standards and timelines for clothing textiles stewardship, informed by insights from projects delivered through the Seamless Circular Clothing Textiles Fund as well as scheme data and member experience.

Contribute practical guidance to the public reporting, monitoring and transparency framework, including fair and workable ways to track participation, circular design progress, reuse and recycling outcomes, and free-rider behaviour.

Engage with industry to shape recommendations for challenge-based grants, place-based pilots and government procurement initiatives that help scale clothing collection, repair, reuse and recycling and grow demand for recycled textiles.

How clothing brands and retailers can play their part

Clothing brands and retailers that are already Seamless members can actively contribute to these outcomes by taking part in consultation activities as they’re announced. Your organisation can also publicly support a fair, mandatory, industry-led stewardship pathway for clothing that is globally aligned, rewards leadership, removes free‑riding and supports innovation and jobs for Australia’s circular economy.

If your brand isn’t yet a Seamless member, now is the time to join and have your say. Learn more about becoming a member here and register your interest here.

We look forward to working with you to shape the future of the Seamless scheme. From developing industry-led recommendations on metrics, to mechanisms that stimulate next markets and invest in textile innovation, our actions will reinforce our whole-of-life approach to delivering a circular clothing economy by 2030.