The Productivity Commission has concluded that Parallel Import Restrictions for books are significantly more costly than previously considered, and this afternoon recommended in its final report that the restrictions be abolished after a three-year adjustment period, to be replaced with more direct forms of support for authors and publishers.
The PC’s move reflects more detailed analysis by the Commission about the costs of the PIRs. While still acknowledging the substantial cultural benefits of the restrictions, the Commission has decided they have significantly greater costs.
In particular, the Commission found that, remarkably, the bulk of the benefit of the PIRs was going to foreign authors. The Commission’s draft report had found that the benefits of the PIRs were about equally shared between Australian and foreign authors and publishers, but further analysis revealed that foreign companies and authors get approximately 50% more benefit from PIRs than Australians, amounting to a substantial leakage directly from Australian consumers overseas.
The Commission had considered trying to limit the PIRs to Australian authors (but found that would breach international treaties to which Australia was a party) or otherwise limit their operation, before deciding that restrictions could not be overhauled effectively to address their costs. Instead, the Commission wants an urgent review of forms of direct support for authors and publishers, with the goal of developing forms of assistance that will achieve the same levels of cultural benefit as PIRs, but without their costs and high levels of leakage overseas. The Commission recommends that the new forms of support be put in place before the PIRs are removed.
Australia’s publishers also appear to have scored a spectacular own-goal by opposing the Commission’s draft recommendations, which centred on reducing the period in which the PIRs could operate to twelve months. On the basis of opposition not merely from those in favour of reform, such as booksellers, but from publishers and authors as well, the Commission concluded that any reform of the existing PIR framework was unviable, and that the restrictions needed to be entirely removed. In retrospect, authors and publishers might have been better accepting that some change was inevitable and trying to minimise it. Their obstinate opposition to any reform appears likely to contribute to the demise of the long-standing restrictions on book importation.
I just read the report. The whole tone of it is contemptuous towards the publishing industry in general and literature in particular. There seems to be a faint sense of outrage that writers should think they can make a living from their own intellectual property. And there’s a punitive whiff in their suggestion that the success of the publishing industry was effectively stealing money and skills from other parts of the Australian economy. Wtf? Isn’t this about competitiveness?
One question puzzles me greatly, and the Productivity Commission at no point explores it (except with a small gesture that explains nothing). Territorial Copyright is a right in all English speaking countries (aside from New Zealand). It is therefore operative in the US and the UK, the major markets where these (highly disputed) comparisons of book prices were made. If PIR does exert such “upward pressure”, why are these other territories such paragons of cheapness? Surely there must be other factors at work than PIRs if books here are more expensive than in the UK and the US? (One can think of several things – GST, increased freight costs due to larger distances between cities, different labour costs, etc etc). Why did the commission just assume it was PIRs? It reads like they made their mind up before they even began the study.
More surreally, why is the PC suggesting that literature is better supported by the government than the so-called free market? Weren’t we trying to make the creative industries more sustainable, not less?
Anyway, the big end of town – Dymocks, Woolworths etc – won their victory. The other big winners will be international publishers, who now have a whole new market to exploit, while their markets remain nicely protected from us. I can’t see who else would benefit if these suggestions went through.
“I can’t see who else would benefit if these suggestions went through.”
What about the general public who buy books?
Only people who buy books from Coles, B igW and Dymmocks may benefit. Coles, BigW and Dymmocks will benefit as their margin on books will increase. There will be less Australian books published so everyone loses. It’s a disgrace that Bob Carr’s article in the Australian does not disclose he’s on the board of Dymmocks.
The Productivity Commission itself admits that there is no guarantee that books will be cheaper. It simply assumes that they will be. No doubt some books will be cheaper, but if the reason that Australian books are (arguably) more expensive than UK and US editions isn’t because of PIRs, but for other reasons, then it’s not going to make a lot of difference to locally published books. Except, of course, that there will be fewer of them. There is no mechanism in place to ensure that any savings on cost price would be passed on to consumers – and Dymocks, which notoriously has offered books at higher prices than the RRP, doesn’t exactly have a great record in this regard.