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Parallel Importation Rules - why we need them

OUR book industry is lively, diverse and inventive, and it’s growing. It may now be our most successful creative industry. But you won’t learn that from the recent Productivity Commission report. As the gospellers of deregulation, the commissioners have stuck to their hymn sheet: remove all import restrictions, strike down territorial copyright!

No surprise about that. The weird thing is that these evangelists for the unfettered market want the taxpayer to bear the cost of their unfortunate cultural engineering. They think it’s fine to undermine royalties, which purely reflect market demand, and that writers should make do with handouts.

The subsidy argument feels like an afterthought. The main focus of the report is the price of books but its analysis is inconclusive. Comparative price is influenced by a mix of shopfront competition, fluctuations in exchange rates, freight costs and GST. You have to take them all into account.

The commission asserts that territorial copyright puts upward pressure on prices, but can’t name a reliable figure or say how prices would fall if we erode the intellectual property rights of writers.

The Commission also airs an absurd ‘leakage’ theory according to which territorial copyright particularly benefits foreign authors and publishers. If we demolish the current rules we will need a ‘flood’ theory instead to describe the waves of dumped stock that will roll in, to the cheers of free-riding foreign publishers and wholesalers.

Australian readers now have real choice about where to shop and how much to pay for a hugely diverse range of books. And under current law they can buy any book they want online even if there is an Australian edition available. Retailers can at any time order any book from anywhere at the request of the consumer. No bookseller in the US or the UK has this right.

Much of the current debate, led by Dymocks, sounds like special pleading for big retail to have even more privileges and protection in Australia. But the boom in Australian writing is not separable from the strength of the independent retailers—this country is unique in the English-speaking world for the vigour of our independent booksellers who have around 20 per cent of the market. Their bookstores are community hubs, as important as parks and public libraries.

If you weaken independent bookstores you take away an indispensable form of entrepreneurial support for writers, support that is far more efficient, cost-effective and creative than any subsidy could ever be.

The Productivity Commission knows how much damage abolishing territorial copyright will do. Its report can’t hide it. Our industry will shrink. There will be fewer printers, fewer books printed in Australia, fewer books published. There will be fewer writers published. Those who are published will earn less money. There will be fewer editors to work with them, fewer independent publishers, fewer foreign rights sales. And there will be fewer booksellers to help a new Tim Winton or Kate Grenville find their readers.

According to the Commission the industry is worth $2.5 billion. Its exports are worth several hundred million dollars. Let’s estimate that removing territorial copyright strips 10 per cent or $250 million of capacity out of the industry. Imagine what would happen to education if we lost 10 per cent of teachers or to medicine if we lost 10 per cent of doctors.

And it’s you, the taxpayer, who will have to pay for this damage, rightly described by Premier John Brumby as ‘economic and cultural vandalism’.

The logic of the Productivity Commission is irresponsibly circular: decide to remove territorial copyright before you know how any subsidy system might work. Then justify it as intensive care for a bleeding industry.

Writing is barely subsidised in Australia now. Direct creative grants to writers to work on their manuscripts are around $3 million dollars per year, a few cents per person per year. Writers would rather sell their work to publishers here and abroad, knowing that the market will uphold their right to be paid according to the contracts they have signed.

What models does the Commission have in mind for successful subsidy systems? They mention the Canadians who inconveniently respect territorial copyright. They fail to mention the Australian film industry on which, in the last few decades, we have spent at least a billion dollars for a market share for Australian films of less than 5 per cent. Australian books without the help of the taxpayer have 60 per cent of the home market.

Of course we must support theatre and dance and cinema so those art forms can survive in this country but it is truly bizarre that these disciples of deregulation want to control writers by making them dependent on government.

Is that why they don’t ask the main question—who is going to edit, print, publish, sell and champion the work of these begging-bowl writers when the industry has been stripped of the capacity and confidence to take a risk on their work?

Michael Heyward, Publisher at Text (This article was published in the Age newspaper on 23 July)

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