Mr McMULLAN (3:12 PM) —I want principally to speak on the Copyright Amendment Bill (No. 2) 1997, but some very important things need to be put on the record with regard to the Copyright Amendment Bill 1997 . Most of them have been said by the Leader of the Opposition (Mr Beazley).

The intellectual property regime, which these two pieces of legislation go to amend, is fundamentally important for the future of the country. It is important nationally and it is important to many individuals. It is important nationally because, as the Leader of the Opposition pointed out, 21st century industry, 21st century jobs and 21st century investment depend greatly upon the extent to which the intellectual property regime of the country in question is seen as world's best practice. And from today, ours will not be.

We are already getting the messages from the United States and there is already recognition in Europe that the intellectual property regime in Australia is being undermined. Therefore, the capacity for us to attract cutting edge investment in those knowledge based industries—not just in the creative industries like music but in software and other things—is undermined from today. So it is very serious nationally. I would like to have more time to dwell on that but I do not. It was, as I said, adequately outlined by the Leader of the Opposition.

Individually, it is very important because it is the intellectual property regime that allows creative individuals—in this instance, creative Australians—to receive income from their works. Both those fundamentals of the intellectual property regime are at risk as a result of the amendments to this bill with which we are dealing today and the amendments which we are considering on their return.

With regard to copyright bill No. 1, I think we would agree with most of what was in that bill. It has been passed with a lot of agreement in the Senate and in the committee considerations before the Senate. Some of the amendments, particularly with regard to 135ZM, are significant improvements and I welcome them.

I want to dwell on only two matters with regard to that. Firstly, the government has wimped on moral rights. It is a very hard issue. The question is in balance in dealing with moral rights in the film industry, and I assume this is where the government has found it too difficult and that has led to the deferral. I accept that it is a very finely balanced argument between those who are concerned that a right that can be waived at the request of an employer is no right at all and those who are concerned that not having a waiver will undermine investment in the industry. They are both arguments of force and they both need serious consideration, but the job of government and of alternative government is to make hard decisions and to deal with the hard questions. If you want to be the government, you should be prepared to make some decisions. You have put it off again until after the election.

Our position is clear. It was put on record by the shadow Attorney-General and I reiterate it; that is, we are opposed to an up-front waiver provision. However, we do think there needs to be a review by the Copyright Law Review Committee into the effect of the moral rights regime on the Australian film industry, within 18 months of the entry into force of the legislation. All the other people who will benefit from moral rights legislation who are not in the film industry should not be suffering as a result of this delay. I am seriously disappointed that the government have wimped on the moral rights matter. They clearly will not deal with it now until after the election. After the election, we will deal with it.

Schedule 3 of the bill is the other principal cause of concern. That was dealt with by the Leader of the Opposition and I will not take the time of the House to duplicate those things, but we have jobs at risk, investment at risk and standards at risk. The government does not know the facts and has put no alternative mechanism in place for pursuing those jobs, that investment and those standards. It is a reckless and incompetent piece of legislation.

I do not wish to dwell any longer on the Copyright Amendment Bill 1997. My principal concern is the Copyright Amendment Bill (No. 2) and its attack on our contemporary music industry on the basis of a flawed and alleged consumer benefit. The trouble with this consumer benefit is that every time you try to find it, it disappears. It is like catching a puff of smoke. It is the gaping hole in this legislation because the evidence for consumer benefit disappears as soon as you try to establish it. It does not take much sophistication to understand the basic economic thesis that underlies it; it is most rudimentary. The problem is that, when you look for the facts, they do not back it up.

The countries which do not have parallel imports have lower prices than the countries which do. The countries which have lower prices do not have parallel imports, and the countries from which people are saying they are going to bring in these legal imports—particularly the United States—do not allow parallel imports. (Extension of time granted)

The minister himself said, `You cannot give any guarantees in this business.' However, the Prime Minister (Mr Howard) purported to do so on 16 October. He said, `The decision will mean the price of Cds will fall by at least $7.' Everybody tried to find the justification for this $7 and nobody could, including the Prime Minister. Then the Minister for Communications, the Information Economy and the Arts (Senator Alston) said, `Actually, it will be between $1.60 and $3.' We all thought that was pretty good. The Prime Minister was only 400 per cent out, and that is better than usual. So we asked, `How do you establish this $1.60 to $3?' The minister said it was from the Bureau of Transport and Communications Economics, but would he release their report to back it up? Not on your life. Every time there is a report that supports the government's argument, it is leaked even before it is officially reported. When it does not suit them, you cannot find it. So you know this argument is not very well backed up.

We are trying to find out the value of the US dollar that is incorporated in the report of the Bureau of Transport and Communications Economics. It is not a criticism of the bureau; it is a comment about when they did the assessment. The best assessment is that the dollar was about US75c to US80c when they did the review, and they probably would have factored that in. If they did not, why won't the government tell us what the underlying exchange rate was? We all know the dramatic drop in the exchange rate since then says that there is no longer any significant price benefit.

There are only four circumstances in which we are going to see a price benefit as a result of these changes: piracy or counterfeit; legitimate imports from countries with lower or nil royalties, so our artists lose; remaindered international material on which no royalties are paid; or when the buying power for multinational retailers is used until they get their stranglehold—until they get rid of the independent retailers—and then the prices will go back up. They might occasionally use a loss leader, but we are going to have a significant impact on specialist music retailers as well as on other areas of the industry.

We tried to find someone who supports this government proposal. From time to time they said, `The retailers support it,' but the Music Retailers Association said, `No, we don't.' They tried to say the independent record companies supported it, but Shock and others said, `No, we don't.' The minister kept quoting managers and groups, like Savage Garden, as being underlying supporters of this proposal, but they and their managers said, `No, we are not.' The manufacturers are not in support of it and the people who work in the manufacturing outfits are not in support of it. All the industry is united against this proposal, even those who are in constant conflict at every other stage: the managers against the big record companies and the small record companies against the big ones.The government has done a remarkable thing in uniting all those parties in the music industry which are usually in conflict. They are all opposed to this proposal. That is because there are jobs at risk—particularly jobs for young people. Sound engineers, people who work in the venues, Australian and international artists who are touring, people in the advertising industry, people in the public relations industry, the managers, the roadies—all those people who work in the industry will find their jobs under threat.

There will still be a music industry in Australia. People are sometimes a bit melodramatic as if it is the end of the music industry. It is clearly not so because there are talented Australians who will succeed—some of them domestically and some of them internationally—in spite of this ridiculous policy. But what this policy has the capacity to do is to transform our successful exporting, job creating music industry into an importation and distribution industry.

Mr Marek interjecting—

Mr DEPUTY SPEAKER (Mr Nehl) —The member for Capricornia is not in his place and will be silent.

Mr McMULLAN —He'd be wrong even if he was in his place, Mr Deputy Speaker. We also have an enhanced possibility of piracy. The information to enforce piracy is provided by the copyright holder; without that information, Customs is rendered virtually unable to enforce the anti-piracy provisions. We do not disagree with increasing the penalties, but it is no good if you cannot enforce them.

We have a remarkable circumstance with regard to discontinued stock where the government, if it must go down this policy track, has not even protected Australian artists from the reimportation of their own material produced overseas. This is policy based on the theory: why have a domestic music industry when you can import one from the United States? It is a very sadly flawed policy but it is not even justified on the normal basis on which some of our industries, quite properly in some instances, have been subjected to competition which is from the multilateral free trade arrangements. (Extension of time granted) I assure the House that, in accordance with the agreement, this will be my last five minutes. I thank honourable members for their cooperation in enabling me to give these three contributions.

Competition is often unwelcome by the people who receive it but Australia has received, in many ways, a net benefit from opening our economy to more competition. But this legislation is not in keeping with our international trade obligations. Let me read to the House a brief, which has not been released, from the Department of Foreign Affairs and Trade to the Attorney-General's Department. The Department of Foreign Affairs and Trade said:

Our chief concern is that the amended legislation, once passed, should not be vulnerable to challenge on the grounds that it is inconsistent with TRIPS and with general WTO obligations. The manner in which the non-infringing character of parallel imported goods is defined has direct relevance in this regard. Criticism might arise on at least two particular questions: any uncertainty over what constitutes an infringing copy could lead to a claim that there is a loophole permitting illegitimate imports; and, in determining the source of legitimate imports, any preference given to members of the Berne Union could be represented as (or in practice demonstrated to be) in conflict with the most-favoured-nation principle, especially Article 4 of TRIPS—

that is, the trade related intellectual property agreement. Those are very serious concerns raised by the Department of Foreign Affairs and Trade to which the government has never responded. The department said:

The proposed amendment is of course narrow in its immediate objective, as a further definition of the permitted sources of sound recordings to be imported as `non-infringing copies' under this Bill, and the need for clarification of the treatment of musical works embodied in these copies. However, this amendment, and the general legislative approach giving effect to the Government's decision on parallel importation, will be scrutinized closely by major trading partners, notably the US and the EU, from the perspective both of bilateral trade interests and of WTO (particularly TRIPS) obligations, and thus may carry considerable weight. Pressure from these parties would be strengthened if the approach taken on this specific legislative amendment could give rise to claims of inconsistency with the TRIPS Agreement. Further, any suggestion of TRIPS inconsistency should be viewed in the light of the active concern of major WTO members (principally the US and the EU) to ensure that the approach taken by developed countries on intellectual property issues does not set undesirable precedents for developing countries as they interpret and carry out their TRIPS obligations; the manifest US and EU desire, on commercial grounds, to sustain a norm against parallel importation is sufficiently great to make a challenge a realistic possibility were suitable grounds available. We discuss two specific areas of possible vulnerability.

This is exposing us to WTO challenge, the very thing the government continues to say we should not do in all the other areas. In most instances on those matters the government is correct and it should be doing the same thing here. The department said:

First, there could be a claim that a definition of a `non-infringing copy' would create a legal avenue for imports of pirated goods—albeit in a limited range of factual situations.

It goes on to explain that. It expresses real concern that this could be challengeable before the WTO—I do not have time to read it all. The department said:

While the proposed amendments do largely address this problem, there are some particular questions that you may wish to clarify during the present drafting phase.

It talks about the way in which the legislative formula may leave open a possibility of inadvertently permitting the importation of goods which will infringe the copyright of goods made in Australia. The second concern is the:

. . . possibility that a country (especially a non-member of the Berne Union and of the WTO) may have exceptional copyright provisions that lead to anomalous forms of consent or ownership that could serve to legitimise imports of goods generally viewed as illegitimate. . .

So that goes to the question of the importation of pirated goods. The department said:

The second main area of concern is the possibility of a claim that subsection 2(b)—

of the bill—

is unacceptable discrimination on the basis of adherence to the Berne Convention—

In other words, you could have discrimination between countries in breach of the WTO and you could have piracy allowed in breach of our TRIPS obligations.

We have a government which properly claims to be an adherent to our international treaty obligations and expects some of their sitting members—like the member for Paterson (Mr Bob Baldwin)—to pay a price in that regard. In most instances the government is correct about that, but here it is ignoring its obligations. It is ignoring them because of an ideological fixation which is wrong on the price front but which will do significant damage to our music industry in Australia. That is why I am delighted to be supporting the Leader of the Opposition (Mr Beazley) in the commitment that, if elected, we will repeal this legislation.