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Wednesday, 15 July 1998
Page: 6130


Mr PYNE (1:40 PM) —I am delighted to rise in this debate today to discuss the Copyright Amendment Bill 1997 and the Copyright Amendment Bill (No. 2) 1997 , particularly the aspect of the No. 2 bill to do with the lifting of the ban on the parallel importation of the same compact disc product. I first put out a press release on this subject in 1995. For the last three years I have been an advocate for a change in policy in this area because I believe that it will lead to lower prices for consumers.

There are a couple of points in the speech of the Leader of the Opposition (Mr Beazley) that I would like to touch on before I deal with some of the elements of the bill. I was reminded of that movie Groundhog Day and the recurring nightmare that the day brought about when the Leader of the Opposition (Mr Beazley) referred to the Labor Party's contemporary music policy after the next election. The Leader of the Opposition said that he would be repealing this bill and encouraging and asking the industry to invest more of their resources on local talent. It took me back to 20 April 1995 when the then government, the Keating Labor government, signed an agreement with the music industry to spend $270 million more on contemporary Australian music in return for keeping the ban on parallel importation.

The sad joke about that was that, although Labor signed the agreement, the music industry did not sign the agreement until about two years later when we were in government and, in fact, did not spend one iota of the $270 million that they had promised on local Australian talent. The Leader of the Opposition admitted that on 15 October last year when he said in a radio interview that there had been little benefit from the $270 million promised as part of the agreement.

So, listening to his speech today, I was reminded of Groundhog Day and the nightmare for consumers in the Leader of the Opposition saying that he expected to get the industry to put money into local talent. The industry already puts money into local talent—we accept that, and they do a good job for the Australian music industry—but that will not be damaged in any way by freeing up this import monopoly and giving consumers the opportunity to buy CDs at cheaper prices. There are a whole host of reasons why this is necessary. Firstly, if this bill does not pass, Australian consumers will continue to flock to the Internet to buy their compact discs. It has been estimated by various groups that billions of dollars of compact disc purchases are made over the Internet each year, and about 15 to 20 per cent of those billions are being spent by Australian consumers. You can buy CDs for anything like $21 or less over the Internet, delivered to your door. The same CD might cost $30 in the local retail shop, so why wouldn't people buy over the Internet? So, if this bill is not passed, retailers will be hurt by it because they are going to lose business to the Internet. The multinationals do not mind because they still get the profit. Whether the CD is purchased in Australia at a retail store or whether it is purchased over the Internet, the multinational in New York, for example, still ends up with the profit.

We have brought about this legislation, and we are very proud of it, for a number of reasons. One of the prime reasons is that we know it will lead to a reduction in price. Woolworths, as late as today, were saying that they expected to be able to pass on the benefits of this legislation to consumers at least in the next two months and probably will be able to bring about price changes of anything between $3 and $7. That is a very significant price reduction, and that will lead to a number of things. It will lead to more CDs being purchased. When consumers buy their Christmas stocking for their friends and their family, rather than buying one or two CDs, they will now be able to afford to buy two or three or four CDs. So the reality is that the government is increasing the market for compact discs being sold in Australia, and that is a very good thing for Australian musicians, for independent labels and for the music industry generally.

We do not expect that this will lead to a contraction of the market for compact discs in Australia—quite the opposite. Economic logic tells us all that, if the prices are being reduced, people will buy more of that product. So people will buy more CDs, and that will lead to a growth in the industry and also will lead to an increase in jobs. (Extension of time granted)

We expect that there will actually be jobs in the industry in retail in the current market in Australia and that the multinationals will continue to produce compact discs in Australia. None of the multinationals will abandon the Australian market, which is very lucrative because we are a wealthy nation. None of the multinationals will abandon the market for compact discs. I would expect that they would stay in the market. More CDs will be purchased because the prices are lower and that will mean more jobs in retail and in the industry itself.

I will also touch on the role that has been played in this debate by ARIA and Emmanuel Candi. I know they were very critical of the government's position and have waged a national advertising campaign. But, as far as I am concerned, ARIA have always conducted this campaign in a civil and sensible way and have stood up for the interests of their industry as they perceive them. I do not agree with the position taken by ARIA in a policy sense, but there will be other issues that will come up in the music industry and in the arts that ARIA and Emmanuel Candi will want to work with the government on. I, for one, am happy to say that throughout this debate, while we have been opponents on podiums across Australia and disagreed in the media, we have always been able to conduct the debate in a very sensible and mature fashion. I would expect that to continue in the future.

I would like to also deal with one of the major problems as perceived by ARIA and the music industry, and that is the question of piracy. The music industry claims that there will be a massive influx of pirated product into Australia and that this is the main reason why the government should not have gone ahead with this legislation. We put in place some absolute cast-iron positions that will ensure that piracy does not become the problem that the music industry says it will become.

Firstly and most importantly for a lawyer—and I know that the Parliamentary Secretary to the Minister for Workplace Relations and Small Business (Mr Cadman), at the table, also has a legal background and will appreciate this—we have reversed the onus of proof for retailers in proving that the product is a pirated product. In the past, the music industry has had to show that the product is pirated. In the future, retailers will have to prove that the product they have for sale in their stores was purchased from a legitimate source and is, therefore, not pirated product.

That gives the music industry a fantastic opportunity to stamp out piracy because no retailers will purchase pirated product—which they will then have to prove is legitimate—to sell in their shops. We do not have the sort of market in Australia as the markets in Hong Kong, Singapore and Taiwan, which sell pirated product through street stalls. We have a very discrete market. Almost all CDs are purchased through retail stores and chains. We are an island nation, with a sophisticated retail network and the music industry and the retailers themselves have given a commitment—as they have always had—to stamping out pirated product.

The second reason piracy will not be a problem is that the price of CDs will be so much lower that one of the main reasons for piracy, namely the sale of cheap CDs, will be pulled out from underneath those seeking to expand pirated product. Finally, with respect to piracy, we have increased dramatically the punishment for the crime of piracy in Australia. The penalties for piracy have been increased 100 times. For individuals the penalty for piracy now involves a $60,000 fine and for corporations a $200,000 fine. So we have reversed the onus of proof, we have massively increased by a hundred times the penalties and we are aware, and the retail industry is aware, that the sophisticated nature of our retail market means that piracy will not be the problem that they expected it to be.

In order to allay any residual fears from the music industry, we have announced that we will be spending $10 million over the next three years to encourage the music industry in Australia. We will add to the contemporary music development fund to support young musicians who are trying to break into overseas markets. We will help them access those markets, have their product put onto the Internet, put business plans together and so on.

In summary, I am delighted that this legislation has come to the House. I am pleased that Senator Colston chose to abstain from the vote in the Senate in order to allow this bill to pass, and I thank Senator Harradine for his support. I congratulate the Minister for Communications, the Information Economy and the Arts (Senator Alston) for the unswerving capacity he has demonstrated in making sure that this bill is seen through the program of the parliament and will be in place well before the next election and in time for consumers to purchase cheaper CDs for Christmas.