The Australian Book Trade and Parallel Importation: a Compromise Proposal

There it was again on Sunday morning - the question to this government that simply won't go away: 'But what unpopular decisions have you taken so far? What painful policy proposals have you implemented?' Barrie Cassidy was interviewing Wayne Swan on The Insiders.

Swan listed a few semi-forgotten things but nothing really emblematic stood out. The parallel importation issue presents a perfect opportunity for the Rudd government to firmly, clearly and very symbolically demonstrate its reform credentials; to send an unmistakable message to the big end of town, the commentariat, the ordinary voter: 'I don't just write essays about the need to improve Australia's productivity performance, the need to continue the process of reform so successfully undertaken by the Hawke and Keating governments - I'm getting on with it'.

But let's get real. Even with the cover of the Productivity Commission's report, it is extremely unlikely that this government will seize the day. First and foremost in its mind will be the loud and continuing shrieks and howls of outrage from the cultural elite if it took this course. And from the printing unions. And from state governments. And the Fairfax press. Support from the usual suspects - the Fin Review, The Australian, Bob Carr - none of this would compensate. This is a government focussed on 'palatable' policy, not policy purity.

Therefore, seeing that we're now close to the end - Cabinet's decision is expected within weeks - and we're at the final hand-to-hand combat stage, it's probably time to frame some sort of compromise position that I believe all players, however reluctantly, would accept.

I sent this letter to Kevin Rudd on September 1:


Dear Mr Rudd

The Australian Book Trade and Parallel Importation: a Compromise Proposal

The media is reporting that Cabinet may be close to debating the recommendations of the Productivity Commission to abolish the Parallel Importation Restrictions (PIRs) in the Copyright Act that currently regulate book importation into Australia by retailers.

I have been an active participant in this debate for over 20 years in my capacity as Managing Director of John Wiley and Sons Australia Ltd, a board member of the Australian Publishers Association for ten years, a past President of that association, and now, having recently retired, through my industry blog Pub Date Critical (www.peterdonoughue.blogspot.com) and my recent appointment as Adjunct Associate Professor at the University of Queensland.

I have always been in favor of reform and have been a lone voice on the publishing side of the ledger.

My sense now, however, is that the industry needs to come together around a compromise position. Such a position could be constructed by your government and I believe it would receive the support of the vast majority of authors, publishers and booksellers, and all their industry associations. It would likely also receive the support, albeit grudging, of those retailers like Dymocks who are strongly in favor of complete abolition.

My proposal would involve two elements:

1. Maintain the 30-day frontlist protection, but only for the first five years of a title's life.
2. Abolish the 90 day backlist provision altogether.

Providing local authors and publishers with protection from parallel importation for the first five years of the life of a particular title would, in virtually all cases, be more than sufficient to get a full return from the investment associated with local development, printing, marketing and selling. Very few publishing projects these days are costed with a view to a life beyond five years, although of course many continue to sell well for years beyond this period. No publisher would seriously consider not investing in a project or author on the basis that parallel importation protection would expire five years after first publication. And no author, established or otherwise, could seriously mount a case that the government had eroded his or her rights to local publication or income.

The current 90 day backlist protection is a legacy of sea freight time frames from the UK and the US and makes no sense these days when air freight is the norm. There have been calls from some industry players that the period should be shortened to 30 days or even 7 days. But allowing retailers the immediate freedom to import if the local publisher is out of stock is by far the best way to maintain competitive pressure on the privileged supplier. In the great majority of cases the retailer will wait for the publisher to re-stock because it is simply less expensive and more efficient to do so. Mostly the wait would be for only a week or two. Once the title is back in stock the local publisher would regain the protection initially afforded.

The virtue of this compromise position is that no industry party could credibly object. Those in favor of adopting the Productivity Commission's total abolition recommendations would obviously be less than happy, but they would at least be able to celebrate a significant movement their way. Close to 80% of English language titles in print would be available on the open market. The authors and publishers, on the other hand, would welcome such an outcome with a fair measure of enthusiasm. They would certainly perceive it as a victory for their lobbying efforts. The 50,000 or so protected titles on the market at any one time would constitute the bulk of industry revenue.

The other virtue of this position is that it does not involve any re-thinking of the current programs of government support for literature or publishing.

I trust you will find this proposal helpful.

Yours respectfully


Peter Donoughue