Parallel Importation of Books

Australia's restrictions on the parallel importation of books result in higher local book prices, according to a report released today by the Productivity Commission. While this is a cost to consumers, the benefits to publishers and authors are not well-targeted.

The Commission undertook extensive analysis of international book prices and concluded that the current restrictions create material upward pressure on book prices in Australia. The size of this effect will vary over time and across book genres, and can be substantial.

By removing the restrictions, local booksellers would have the option of accessing better value books from overseas. Local publishers would have a strong incentive to make their prices more competitive and to look for greater efficiencies in their operations, the report said.

Some books have important cultural value, but the Commission found that the support to Australian authors provided by the restrictions is poorly targeted. 'One of the Commission's concerns is that consumers pay higher prices for books, regardless of their cultural significance' the Commission's Deputy Chairman, Mike Woods, said. 'A second concern is that these costs to consumers generate greater benefits for overseas authors and publishers than they do for our local writers. In effect, Australian consumers are subsidising foreign book producers.'

Whereas the Commission's draft report had proposed a partial liberalisation of the import restrictions, following further evidence, the final report recommends their repeal, with the industry having a period of three years to adjust before the changes take effect. The report recommends that the current range of grants and other financial assistance be refined to better target the local writing and publishing that adds cultural value to Australian society.

In commenting on this change, Mr Woods said: 'having considered the industry's feedback on the draft, and undertaken further analysis, the Commission found the case for repealing the restrictions compelling. Coupled with improved subsidy arrangements to address the relevant cultural aspects of Australian literature, the reforms would benefit the community overall.'