Clothing manufacturer Pacific Brands has pulled out of the Melbourne Fashion Festival after outrage at its decision to send jobs offshore.
The company recently announced it is to close its factories in New Zealand, with the loss of nearly 100 jobs. It has also axed 1,850 jobs in Australia.
The National Distribution Union expressed disbelief that the company would chose to sponsor the Melbourne festival to the tune of up to $500,000 when it had cited financial hard times for closing its factories.
Pacific Brands will now have no presence at the festival, but will still have to hand over nearly $130,000 in sponsorship money.
The company said it was closing its factories in Palmerston North and Christchurch because it could no longer compete with cheap imports from China and other countries. However, it had committed up to $500,000 to the fashion event, which starts next weekend.
National Distribution Union president Robert Reid says this is incomprehensible. Mr Reid says workers represented by the union in New Zealand will be very angry, and Australian workers have already said they will protest at the use of the money.
Earlier, a spokesperson for Pacific Brands told the ABC that it had been a long-term supporter of the festival. He said it was an essential part of the company's support of the fashion industry and an important part of its business, which will still employ 7,000 people.
Last week, Australian Prime Minister Kevin Rudd said his government would reclaim money given as grants to the company for research and development if it moves its operations to China.
Mr Rudd, who later met some of the workers who will lose their jobs, said he would do his best to help them.
He said his employment minister would write to them outlining their entitlements and the government would help them to find new jobs.