Productivity Commission advises dropping 30-day rule

In a much-anticipated report released today on ‘Restrictions on the Parallel Importation of Books’, which sought to “assess the benefits and costs of the PIRs”, the Commission issued three key recommendations:

 

RECOMMENDATION 1
The Government should repeal Australia’s Parallel Import Restrictions (PIRs) for books. The repeal should take effect three years after the date that it is announced.

 

RECOMMENDATION 2
The Government should, as soon as possible, review the current subsidies aimed at encouraging Australian writing and publishing, with a view to better targeting of cultural externalities. Any revised arrangements should be put in place before the repeal of the PIRs takes effect.

 

RECOMMENDATION 3
The outcome from the repeal of the PIRs and any revised subsidy arrangements should be monitored and assessed five years after implementation. To assist that assessment, the Australian Bureau of Statistics should, as soon as possible, undertake a revised version of its 2003-04 surveys on the books industry and market, having regard to the information gaps and interpretation problems identified in this study and relevant data held by other agencies. It should then update these revised surveys prior to the commencement of the five year assessment.

 

The 240-page report did acknowledge that there would be a negative impact on the printing industry if PIRs are lifted, saying that “PIRs have created more demand for Australian printing, particularly as a result of the 30 day rule”.

 

“In the absence of the PIRs, publishers (and printers) would generally need to make adjustments, with some finding new efficiencies that would at least partly compensate them for the greater degree of competitive pressure,” the report states.

 

The report goes on to say that the benefits of PIRs for local industry “are largely paid for by Australian consumers of books through higher prices and restricted access to better value editions of the titles they wish to purchase”.

 

The report cites submissions from Printing Industries which claimed that as much as $80 million worth of business would be lost to the printing and associated industries.

 

“Based on industry feedback, Printing Industries projections point to the loss of [a] significant number of jobs in regional centres, with the impact not just limited to book printing, but also associated industries such as paper manufacturers and suppliers, inks and other consumable suppliers, pre press companies, post press companies such as book binders and local transport companies are all expected to experience reduced activity”, the report says.

 

Submissions from several printers echoed these concerns, with Griffin Press claiming they could “cease to be viable” if PIRs are lifted. In another submission, Ligare estimated 26 per cent of its revenue could be “wiped out within 12 months”.

 

“As such, while the Australian printing industry would likely contract without the PIRs, the local advantages enjoyed by Australian firms would serve to limit this effect,” the report claims.

 

“The PIRs were not designed to operate as a regional support mechanism, and dedicated, targeted policy instruments would be more effective and efficient.”

 

The recommendations won’t come as great shock to the industry, with the draft version of the report earlier this year leading Printing Industries chief executive Philip Andersen to claim that the federal government was attempting to “railroad people into believing they had found a miracle cure for a non existent condition”.

 

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