It's time to kill parallel import restrictions

Bookmark and Share Economics & Deregulation | Evan Mulholland
Crikey 23rd June, 2016

Abolishing parallel import restrictions on books isn't neoliberal ideology, as Tim Winton, Richard Flanagan and Magda Szubanski claim - it is social justice reform.

It is a reform that would deliver lower book prices to Australians by removing a rent-seeking benefit to the multinational publishing industry.

Currently, Australian booksellers are prevented from importing books manufactured overseas if the book has been published by an Australian copyright holder within 30 days of overseas release. In effect, Australian publishers are granted a monopoly over any book they choose to publish and are protected immediately from foreign competition.

Parallel import restrictions are an effective tariff on international trade, similar to the archaic tariffs that were abolished under the Hawke-Keating government. We now have a wealth of evidence to confirm this.

In 1998, the New Zealand government took the brave decision to remove import restrictions on books. A 2012 review of that reform by Deloitte Access Economics commissioned by the NZ Ministry of Economic Development found that book prices are lower in New Zealand than in Australia and that the changes "had little impact on overall creative effort in the New Zealand book industry".

Australian authors claim the changes will decrease profitability in the Australian market and will result in fewer Australian books being published. This claim is not backed up by evidence. The same report found that the number of new New Zealand book titles published annually has remained fairly steady, and that the share of authors in overall employment and income earned by publishers actually increased following the changes.

The Prices Surveillance Authority report 1989, the Australian Competition & Consumer Commission reviews in 1999 and 2001, the comprehensive Productivity Commission report in 2009 and, more recently, the Harper review all found that removing import restrictions would make books cheaper for consumers, and recommended their abolition. The Harper review's recommendation was accepted by the Turnbull government.

The draft Productivity Commission report into intellectual property recommends that the Australian government abolish parallel import restrictions on books, saying there is no new evidence that changes the case for removing the remaining restrictions and that it is the analogue equivalent of geoblocking.

Reading and literacy are a social good. Removing these restrictions will mean libraries and schools can order more books, families will be able to buy more books for their kids, university students won't have to struggle to buy textbooks, and local bookstores will be able to compete on a level playing field with Amazon, to the benefit of small businesses and the consumer.

Labor's recent arts policy announcement had a piece both ways but slanted towards taking the side of the publishers without clearly stating its position.

This is a disappointing development as it slows what was rising bipartisanship on the issue. Labor's student wing, the National Union of Students, launched a campaign against the laws, as they recognise that PIRs make textbooks substantially more expensive for struggling students. Labor shadow treasurer Chris Bowen brought the proposal to cabinet under the Rudd government and is a known supporter of the changes, along with former Labor ministers Bob Carr and Craig Emerson.

Emerson said of the reform: "Cheaper books for kids in poor communities is a good social reform." He also said that multinational book companies put pressure on local authors and publishers to oppose the removal of restrictions. Authors like Tim Winton are lining up to be that very face.

A famous Australian like Winton is a much gentler face to argue for the status quo than that of a large multinational publishing giant that uses this archaic tariff to make profits at the expense of Australian consumers.


At the recent book industry awards, Richard Flanagan launched an attack on the government's position, with an emotive plea to vote against the Liberal Party. This is a disappointing worldview from Flanagan to completely dismiss the struggle many Australians face with book prices.

Attempts to derail the government's attempt to abolish parallel import restrictions on books recall the fear campaign ran by Peter Garrett and John Farnham in 1998 when the Howard government abolished parallel imports on CDs. Did the music industry in Australia die as they suggested it would? No. Did CDs almost halve in price? Yes.

We are in an age of digital disruption where businesses have had to adapt to adjust to a changing consumer climate. The prominence of Amazon has been around for quite some time. Australians know they can buy books cheaper from Amazon, an they do. Yet our retailers have no opportunity to adapt due to import restrictions inflating the price of our books. When the Prime Minister talks of the needs to be an agile economy, this is exactly the type of reform that does that.

The jig is up. This is a case of out-of-touch authors teaming up with big business at the expense of the consumer - book-loving Australians.