The Commission recommended that such a repeal should ‘take effect three years after the date that it is announced'.
The report's other key recommendations were that the government should ‘as soon as possible, review the current subsidies aimed at encouraging Australian writing and publishing' with any revised arrangements to be ‘put in place before the repeal of the PIRs takes effect' and that the Australian Bureau of Statistics should ‘as soon as possible undertake a revised version of its 2003-04 surveys on the book industry and market, having regard to the information gaps and interpretation problems identified in [the Commission's] study and relevant data held by other agencies'.
The Commission also recommended the government monitor the outcome of its recommendations five years after they have been implemented.
Subsidy scheme
A key part of the Commission's recommendations is a suggested subsidy scheme to ‘offset the cultural externalities' of local publishing (see Appendix F). The Commission's preferred scheme is based on a Canadian model and proposes to reimburse publishers on the basis of reported sales.
The Commission suggests revising current funding arrangements including the Australia Council's Literature Board grants, the Education and Public Lending Rights, Books Alive and government-funded literary awards to create a funding pool, which it currently values at over $25 million per year. Publishers of books in certain subject categories deemed to have ‘cultural value' would be eligible to apply for subsidies estimated at approximately $1.40 for each copy sold.
For the scheme to work, the trade would need to agree on standardised and rigorous subject categories and be able to provide robust and complete sales figures.
However, controversially, the Commission suggests completely excluding educational publishing from this subsidies system. ‘We have severe concerns about the impacts that this will have on educational publishing in Australia and therefore on Kevin Rudd and Julia Gillard's education revolution,' Australian Publishers Association (APA) CEO Maree McCaskill told WBN.
Australian Booksellers Association (ABA) CEO Malcolm Neil said such a recommendation also ignored the role of booksellers. ‘There appears to be no acknowledgement of the--in quotation marks!--‘cultural externalities' that flow from bookshops,' he told WBN. ‘The fact that a store like Readings was acknowledged for the success of Nam Le at the recent ABIA awards demonstrates the contribution made by booksellers.'
APA, ABA, ASA, ALAA and Printing Industries reject report recommendations
Unsurprisingly, the ABA and APA, together with the Australian Society of Authors (ASA), the Australian Literary Agents Association (ALAA) and printing peak body Printing Industries have all attacked the Commission's recommendations.
The APA said the Commission's report was ‘a triumph of ideology over evidence'. Citing the objections of publishers, authors, printers, state governments and ‘over 90% of booksellers', that wished to see the current legislation retained, APA CEO McCaskill said the Commission had ignored the evidence put by these parties because ‘it doesn't fit the rigid free-market mindset of the Productivity Commission, which is determined to abolish [PIRs], evidence or no evidence'.
APA spokesperson Jose Borghino told WBN the APA would continue to lobby on the issue now that the final report had been made public. ‘From our point of view it's the same campaign we've been running for 12 months,' he said. ‘We've been running a campaign that dealt with [the Productivity Commission] and also with political relations. COAG and the chief ministers are against changing the system--it now goes to cabinet. We know there are some hard heads in cabinet,' he said, but added the APA was ‘also confident they are capable of listening to a range of arguments that go from economic through to cultural'.
Nonetheless, McCaskill warned that, even with state governments opposed and the Productivity Commission itself admitting that the abolition of PIRs would ‘of themselves cause some contraction or slowing in the growth in the book production industries', the federal government would not necessarily be swayed by the likelihood of job losses. ‘I came from the textiles industry,' she said, ‘and I don't reckon you can predict anything.'
The issue is likely to be a hot political topic, with the Sydney Morning Herald (SMH) reporting that both the minister responsible for any changes, the Attorney-General, Robert McClelland, and Arts Minister Peter Garrett are understood to support the current system. ‘There is, however, a competing view that publishers have been cosseted by the restrictions, likely to be advanced by ministers with economic portfolios, such as Craig Emerson,' SMH reports.
ABA CEO Neil said that the Commission had ignored the impact of its recommendations on small businesses--which he said made up 30% of the book retail industry--and that ‘the cursory examination of their concerns and the cavalier way in which they are dismissed stands at odds with government policy'. Like McCaskill, Neil said the Commission's recommendations were based on ideology rather than evidence.
‘Other than an ideological debate between various economic think-tanks, we see no evidence of a call from the rest of the community that justifies the introduction of yet more uncertainty into our industry,' he said.
The ASA's executive director Jeremy Fisher warned that if the changes were implemented by government Australia would ‘become an international laughing stock' and said the ASA's position was supported by the New Zealand Society of Authors, the UK Society of Authors and the Authors Guild in the US.
‘The Australian publishing industry is ... highly regarded internationally and it prospers without any support from the taxpayer, unlike most other creative industries,' said Fisher. ‘What sense is there in punishing success by removing territorial copyright? Only free market economists could be so pig-headed--but of course their deregulatory mantra caused the global financial crisis!'
Text publisher Michael Heyward also pointed to the success of the local industry, citing territorial copyright as ‘the very thing that underpins one of the most successful cultural industries we have'.
Arguing that the final report's recommendations, if implemented, would ‘make it harder for Australians to be published and paid fairly, and will provide a big free-kick to foreign-based publishers and wholesalers', Heyward said Australian taxpayers would end up paying the price for the damage done to the industry. ‘According to the Productivity Commission, the government must immediately review the subsidies it provides for writing and publishing,' he said. ‘In other words, it wants the government to massacre the industry and then assemble a fleet of ambulances to pick up the wounded.'
The ALAA similarly rejected the Commission's recommendations. ‘Australian writers must be able compete with international writers under the same terms,' it said.
Also rejecting the recommendations was Printing Industries, the body representing Australian printers. CEO Philip Andersen said the recommendation ‘to remove the 30-day rule by opening the market for books now threatens both the future growth and viability of the Australian book printing industry'.
Print 21 reported that the print industry group intends to lobby the Prime Minister and other key ministers, including the Minister for Innovation, Industry, Science and Research, Kim Carr, who will be attending the next Printing Industries CEO forum in Sydney on 5 August.
‘It's a long way from being a done-deal,' said McPherson's chief executive Alan Fahy. ‘There's still lots of fighting to be done and I have faith that politicians will see the impact that this will have on the industry.'
Changes not soon enough for Coalition for Cheaper Books
Also lobbying, but for a very different reason, will be the Coalition for Cheaper Books, led by Dymocks CEO Don Grover, which said it was disappointed that the Commission had recommended a three-year transition following any decision to abolish PIRs.
‘We don't believe the book industry can wait three years for these changes,' said Grover. ‘Booksellers can't afford to continue to compete with internet suppliers whose market share will just keep rising while we pay inflated wholesale prices over the next three years.'
Former NSW Premier, now Dymocks board member, Bob Carr, another strong advocate for the lifting of PIRs, said the recommendations, if enacted, would mean a ‘win for Australian literacy' as 'downward pressure on book prices brings more books into homes and puts them within reach of youngsters'.
Writing in the Australian, Carr echoed the Coalition's view that ‘the only disappointment is the recommendation for implementation over three years'.
Price wars continue
While Carr argued that the abolition of PIRs would result in ‘downward pressure on book prices', and the Coalition for Cheaper Books, as its name spells out, is lobbying on the basis that parallel importation would reduce book prices, the issue of price is still one of the most contentious in this debate.
McCaskill reiterated the APA argument that book prices in Australia were more greatly influenced by exchange rates than by PIRs. ‘The Commission admitted ... in its interim report early this year ... that books were no cheaper overseas when the 10-year average exchange rates were taken into account,' she said in a statement. ‘On prices, the worst case scenario it can point to now is that over 10 years UK book prices would be slightly dearer than Australian prices and US prices slightly cheaper, by a matter of cents.'
The Productivity Commission writes in its report that ‘the Commission concludes that the PIRs place upward pressure on book prices and that, at times, the price effect is likely to be substantial'--leading to the conclusion, voiced by Carr, that the removal of PIRs would therefore lead to ‘downward pressure' on prices.
However, like the APA, many dispute this logic. Criticising the Commission's price comparisons for not taking freight costs into account, Scribe publisher Henry Rosenbloom writes: ‘[The Commission] knows it can't prove its case, so the best it can do is exclude vital evidence and continue to assert that that PIRs are responsible for a mystical "upward pressure on prices".'
The APA continues to argue that there is no evidence that any cost savings to booksellers resulting from an open market would be passed onto consumers.
Equally contentious is the use of the New Zealand publishing industry as proof of the benefits or otherwise of an open market. In its statement the Coalition for Cheaper Books claimed the New Zealand open market for books and music ‘had seen both markets grow and prosper'. ‘There are more publishers in New Zealand today employing more people,' it said, adding that New Zealand Book exports have nearly doubled since 1998.
However, McCaskill said that the Commission itself ‘admits there is no evidence of price falls when New Zealand abolished territorial copyright'.
Authors speak out
New author Richard Newsome, whose The Billionaire's Curse won Text Publishing's inaugural YA writing prize, echoed his publisher's concerns in a letter to WBN and bestselling author Garth Nix, who has voiced his views prominently in the debate, reiterated in a letter to WBN his concern that the proposed changes would result in an uneven playing field for local publishers.
‘All that most Australian authors and publishers want is to be able to compete on the same level playing field as American and British authors, that is, to have a national copyright territory,' wrote Nix. ‘If removing that territory is such a bright idea, as the Productivity Commission suggests, why don't the USA and the UK get rid of their copyright territories? The answer is because they know the value of their cultural industries, both in economic terms and in the healthy life of a nation.' (Read Nix's full letter here.)
Also engaging mainstream media on the debate recently have been authors including Peter Temple, and Shane Maloney.
For comprehensive links to mainstream news stories and blog posts on the parallel importation issue, see WBN publisher Tim Coronel's Delicious links here. Coronel will continue updating links regularly.
Any comments on the issue can be sent to bookseller.publisher@thorpe.com.au.
