The Innovation Minister's media release argues that
Australian book printing and publishing is under strong competitive pressure from international online booksellers such as Amazon and The Book Depository and the Government has formed the view that that this pressure is likely to intensify. In addition, the technology of electronic books (e-books) like Kindle Books will continue to improve with further innovations and price reductions expected.The Productivity Commission argued that Parallel Import Restrictions (PIRs) are an inappropriate barrier, noting that
for a title to qualify for protection under the PIRs, the Australian territorial rights holder must release the book in Australia within 30 days of it being published elsewhere in the world, and must maintain a capacity to resupply it within 90 days. There are some exceptions to the restrictions — consumers can purchase books from abroad, for example via the internet and, under the 'single use' provisions, a bookseller can purchase a single copy of a book that would otherwise be PIR-protected, to fill a specific customer order. Under the PIRs, if a particular novel or textbook is published in Australia within the 30 day limit, booksellers cannot import and sell stocks of the same book from, say, the UK, the US or Asia. This enables rights holders to charge prices (or obtain royalties) in the Australian market with the certainty that they cannot be undercut by commercial quantities of imports of the same titles. Assistance from Australia's PIRs is not limited to Australian publishers and authors. The publishers who benefit from territorial protection can be Australian businesses, Australian arms of international companies or international companies operating from other countries. Likewise, the works of both Australian and foreign authors are equally protected from parallel imports into Australia.It considers that PIRs provide
territorial protection for the publication of many books in Australia, preventing booksellers from sourcing cheaper or better value-for-money editions of those titles from world markets. From the available quantitative and qualitative evidence, the Commission has concluded that the PIRs place upward pressure on book prices and that, at times, the price effect is likely to be substantial. The magnitude of the effect will vary over time and across book genres. Most of the benefits of PIR protection accrue to publishers and authors, with demand for local printing also increased. Most of the costs are met by consumers, who fund these benefits in a nontransparent manner through higher book prices. PIRs are a poor means of promoting culturally significant Australian works. They do not differentiate between books of high and low cultural value. The bulk of the assistance leaks offshore, and some flows to the printing industry.Given that assessment it is unsurprising that the Commission claimed that
Reform of the current arrangements is necessary, to place downward pressure on book prices, remove constraints on the commercial activities of booksellers and overcome the poor targeting of assistance to the cultural externalities.
