Mr McCLELLAND (12:36 PM) —The opposition will be opposing the second reading of the Copyright Amendment (Parallel Importation) Bill 2002. Essentially, the subject matter, on the one hand, is dry insofar as it deals with a technical copyright issue. However, on the other hand, it is a vitally important issue for the development of Australia's new economy and creative industries in terms of its proposal to remove the restrictions that currently exist in respect of the parallel importation of software products, books, periodicals and print music in circumstances where there are Australian creators or producers of that material, obviously with the copyrights to distribute that material in Australia.

The issue is fundamentally one of how we protect the intellectual property that exists in these creative endeavours. Fundamentally, we believe that watering down or removing the restrictions on parallel importation has the potential to significantly damage and retard the development of these important industries. Indeed, we go so far as to say that essentially the government's proposals are an example of ideology masquerading as policy. The bill is substantially identical to the bill which lapsed at last year's federal election. That bill, the 2001 bill, was examined by a Senate committee and received a worse than lukewarm response, even from government senators. The picture which emerged from the evidence given to that committee was that the bill was more likely to damage Australia's creative industries than provide any tangible benefits to Australian businesses or to Australian consumers.

At the election, Labor gave a commitment to the Australian people to oppose the bill and to pursue the extension of our very successful `use it or lose it' policy that applies in respect of books. We have proposed extending the policy to software products, books, including electronic books, periodicals and print music. Indeed, we are fortified in our decision to oppose the bill by the Howard government's comprehensive failure to address those matters of concern which were raised by its own senators in that Senate committee. Essentially, the committee found that there is a distinct lack of evidence justifying this winding back of the protections in respect of the parallel importation of these products. If you read the report, you can very quickly see that the government senators themselves felt that their ability to analyse the competing arguments involved in this debate was impeded by the narrow terms of reference that had been established by the government itself. The government senators observed:

That was the government senators themselves saying that the terms were unreasonably restricted by the government itself. They said specifically in that document that they were unable to consider differences in the respective markets between these items: books, periodicals, music and computer games.

The guts of the evidence that was relied upon by the government is price data published by the ACCC, most recently in 2001. This data was the subject of great criticism by, in particular, the current shadow Treasurer in his speech when the equivalent of this bill was last before the parliament prior to the last election. I will not go over the current shadow Treasurer's analysis of the data but, by way of summary, the data attempted to show that the price of books and software in Australia is higher than it is in the United States or the United Kingdom. They did an averaging of the data over a 12-year period and, looking at the trend in the recent years, there is very little if any difference between the pricings in Australia, Great Britain and the United States. Not only that, as the government senators indicated in the report to which I have referred, the ACCC did not take into account factors such as freight costs, conversion costs and discounts. Indeed, the senators observed the situation in these terms:

In the face of those doubts regarding the validity of the data, or at least the validity of the conclusions based on that data, and finding out the underlying factors, the Senate report recommended that the government undertake an independent study of the relevant issues to really get to the bottom of the argument and bring out the true facts. Bearing in mind the significance of this issue, the development of Australia's creative industries and tampering with the regulatory framework that exists or, as we will indicate in a second reading amendment, having what exists in Australia as a generally intricate regulatory framework and then throwing open our industries to the pressures from overseas, such as dumping, return of remainder copies of items and the like, without basing it on a detailed and rational analysis of this data is a high-risk strategy. But the risk will fall on these emerging and important creative industries and, of course, Australians who are employed in these industries.

It is regrettable that the government has failed to accede to that recommendation, considering that the committee's government senators were in favour of it being made. Essentially, we are being asked here to take the government at its word: firstly, with the existence of a price differential between Australia, Great Britain and the United States; and, secondly, with the answer being the removal of parallel importation restrictions. Quite frankly, the government has not made out a case for that to occur. Indeed, in that report to which I have referred, that is acknowledged again by the government senators. Referring to the government's removal of parallel importation restrictions in the area of music CDs, they say:

They further say:

Here again, government senators indicate that the case has not been made out that facilitating parallel importation is of benefit to Australian consumers. It certainly does present a considerable risk to Australian creators and Australian producers. It is important to put the likely impact that parallel importation will have on those industries into context with this government's truly abysmal record with the promotion of research and development. One of its first acts was to reduce the research and development tax concession from 150 per cent to 125 per cent—and this was at a time when our regional competitors were sitting on an encouragement for research and development in their countries of about 200 per cent. I will put it by way of an analogy. A Rugby Union team has 15 players; this government has said to Australian industry, `All right, your two breakaways or your two fly-halfs will be off the field for the entire game and the lock forward will play only half a game,' but the other team have another five players on the field. Who is going to win that game in the long term? It will be the team with the greater resources. Other countries, our regional competitors, are prepared to back their industries, but this government is not prepared to back Australian industries.

Looking only at jobs and investment in the video games industry, it is commonly assumed that our only video games are those which are imported from overseas. In fact, at least 1,000 employees are involved directly in the production of video games in Australia. It takes a lot of money just to develop one game—a lot of money. But it is a developing industry. There are 1,000 employees directly involved in the production of video games. In many cases, they are highly skilled, technically advanced employees, having skills that one would think should be developed from the point of view of the broader industrial development of our computer hardware and software products. There are 1,000 employees directly involved in the production of these games, not to mention literally thousands involved in the retailing of them—and not only through major stores, such as your Harvey Normans, but also through smaller businesses, such as Games Wizards and other local enterprises.

With the removal of restrictions on parallel importation, whether you like it or not, we will see an increase in piracy. However, even without that increase in piracy, just being able to suck into the country dumped copies from overseas will put a large number of those smaller retail outlets out of business. It will prejudice the employment of not only those directly involved in the industry but also those who are involved in retailing. That, in itself, indicates how penny-wise and pound-foolish this decision is because of the loss of revenue that the government will have as a result of a decline in those industries.

The Games Developers Association of Australia has expressed concern that the imposition of a regime of parallel importation will jeopardise the growth of this promising local industry. The association has drawn attention to the need to simplify the regulatory framework to encourage greater local investment in its industry. But without addressing those regulatory strictures that are imposed on our industry, the government wants to open our industry to cheap imports from overseas—and I say `cheap imports' not in the sense of price but in the sense of quality: dumped, superseded items and so forth or pirated copies. The Howard government is not working with the industry to free it from unnecessary regulatory burdens. The Howard government is continuing to arrogantly persist with its ideological push for more parallel importation. It is not standing by and protecting our Australian industries, these important emerging developing industries, but keeping the regulatory structures in place while throwing them open to these international pushers.

Authors and publishers likewise have drawn attention to a range of adverse consequences the bill would have for Australian writing and publishing. The Australian Society of Authors has pointed out that the proportion of total book sales in Australia represented by books originating in Australia has risen from 10 per cent in the mid-1970s to more than 60 per cent in the late 1990s, which shows a tremendous growth in Australia's literary culture and in the publishing industry. One foreseeable consequence of the bill will be to allow for overseas editions of Australian authors' books, including remaindered editions, to be sold on the Australian market. That is significant not only for the publishers, which can be more substantial corporations, but also from the point of view of Australian authors who will receive reduced royalties on non-remaindered overseas editions and get absolutely no royalties at all on the remaindered ones.

It is difficult to escape the conclusion that parallel importation would undermine the incentive to promote Australian authors overseas and to seek out overseas rights to sell Australian written publications on the overseas market. Surely the Liberal Party does not want to see fewer Peter Careys, Kate Grenvilles, Colleen McCulloughs, Thomas Keneallys—and I could go on for a page naming internationally respected Australian authors who will all face difficulties if this legislation is passed. Any emerging young writers will face even greater difficulties.

A significant issue which the government has failed to address is the effect that this legislation will have on piracy. It is commonsense that the more channels of importation you have without standard identification of the source of the manufacturer, the easier it will be to bring pirated copies into the country. Yet this is a subject on which the Howard government has had almost nothing constructive to say and has done virtually nothing about. I refer, for instance, to the tone of the Minister for Communications, Information Technology and the Arts, Senator Richard Alston, this year when, in an interview to the Australian Financial Review, he virtually ridiculed the matter. He referred to `the myth of an Australian piracy problem'. The minister had obviously forgotten the conclusions of the unanimous cross-party report of the House of Representatives Standing Committee on Legal and Constitutional Affairs. It concluded, relevantly, on piracy in three key areas. First:

That is a specific cross-party finding. Second:

It is a perfect money launderer for organised crime to bring in pirated computer games, books and other products. Third:

Again, a warning to the government from the committee. The government may be forgiven for forgetting about that report, because it was handed down some 24 months ago. It is my experience that there are talented members from both sides of the House on that committee, and its recommendations have just been ignored for the past 24 months. To do that is an insult to the committee and to the parliament.

But the proof of the pudding is in the eating, I suppose, and the government's head-in-the-sand attitude was shown to be truly out of step when, in September of this year, the New South Wales police announced that they had seized 20,000 videos and CDs believed to be part of an international piracy syndicate. The government said, `There may be a bit of a problem here' but, in what appeared to be a bit of a panic, the Attorney-General issued a press release to say that there was this new-found piracy problem. A fortnight after the seizure, he hailed as a great success the prosecution of a man who had pleaded guilty in the Penrith Local Court to selling pirated DVDs at the Penrith markets. That person agreed to forfeit a mammoth 237 pirated DVDs—

Dr Emerson —Did he keep the other 23,000?

Mr McCLELLAND —Yes, or his contacts behind him: we do not know the full extent of the kit there. He also agreed to pay a fine of $5,000. But that is just no comparison to the extent of piracy that clearly is occurring in the community and that this government has done nothing about. The fanfare that the Attorney-General created about that guilty plea, the forfeiture of a relatively small number of DVDs and what is, in the overall scheme of things, the payment of a minor fine, tends to show that the government is just coming to realise that this is a big problem on the horizon. Despite that, it is winding back parallel importation restrictions without putting any steps in place to address the matters that have been referred to it by the cross-party legal and constitutional affairs committee.

I acknowledge that late last year the government finally did establish a government industry consultative group on intellectual property enforcement. We believe, on the information available to us, that a federal police officer has also been designated to take specific responsibility for intellectual property crime intelligence collection. That is a start, but it is only a start. The government has been put on notice for a long time about this problem and literally has just put its toe—not even its foot—in the water in regard to doing something about it.

When we press the Attorney-General on the government's slowness in responding to these reports, he says, `You have to be careful. These areas are complex. There must not be a knee-jerk reaction.' We agree with that. There needs to be a sensible and balanced approach, but we would like to see some reaction.

Dr Emerson —Any reaction!

Mr McCLELLAND —Yes, any reaction. On the other hand, in fairness to the Attorney-General, the representatives of the Attorney-General's Department let it slip recently in the Senate estimates process that the person sitting on reform in this area is perhaps the Minister for Communications, Information Technology and the Arts as opposed to the Attorney-General. Whoever it is, they had better get on with the job of reforming this area and protecting these important emerging creative industries against what is an increasing assault by pirated copies on a substantial scale—with evidence suggesting, as the House of Representatives Standing Committee on Legal and Constitutional Affairs indicated, the involvement of organised crime. It is gross neglect, at best, for the government to fail to do something about this.

The standing committee made a number of relevant recommendations on ways forward to address the issue of piracy. They recommended that the documentation which commercial importers were required to complete when importing a product into Australia should include a declaration to the effect that the product has been made in Australia. They recommended that the Copyright Act should be amended to provide greater deterrence. They recommended that the Minister for Justice and Customs, in conjunction with the Commissioner of the Australian Federal Police, should establish within the Australian Federal Police a task force for the enforcement of intellectual property rights, comprising representatives from state police forces, Customs, the Attorney-General's Department and industry policing bodies, with the performance outcomes of the task force to be contained in an annual report.

Those recommendations were sensible. However, more meat needs to be put on the bone of those suggestions. We appreciate that it is not a straightforward area, but the government has not even made a start. However, despite not protecting the industry and despite not doing anything about the regulatory regime which applies to these emerging industries in Australia, the government is removing protections. What do we say? We are not saying that we are going to just reject this. We are suggesting that the best answer is the `use it or lose it' regime that has applied to books since 1991. Basically, it applies in the following manner. Non-pirated copies of a book first published overseas can be brought into Australia if the book was not published in Australia within 30 days of the first overseas publication, or an order for the book is not met by the copyright owner or the licensee or agent within 90 days of the order, or the order is a single non-pirated copy of a book that fills a verifiable order from a consumer, or if it includes multiple non-pirated copies of a book to fill a verifiable order from a not-for-profit library. Essentially, that is the guts of it.

Australian consumers do not need to be prejudiced by this. They have to have books available in Australia at a reasonable commercial price within a reasonable time, or they can import items for their own individual use, or not-for-profit libraries can import books, but it does not enable this wholesale importation from overseas for commercial purposes. Thus the guts of where the opposition are coming from is to protect Australian industries but, at the same time, to ensure that, while these important emerging Australian industries are protected, Australian consumers are not prejudiced. Quite frankly, if the government is prepared to come to its senses, drop its ideological obsession and stand up and speak the language of defending these important emerging creative Australian industries, we will certainly work towards achieving outcomes, as we will in the area of copyright reform generally and, in particular, in addressing piracy.

In conclusion, I note that it beggars belief that the government is pushing forward with its agenda of relaxing parallel importation restrictions when that is going to be an impediment, we understand, to its negotiation of a free trade agreement with the United States—which appears to be the government's only constructive international agenda at the current time. It is extremely disappointing that, when there is so much to be done by government to foster and develop Australia's innovative, knowledge based industries, the Howard government has run out of puff and ideas and has fallen back on tired, ideological and flawed proposals such as this bill. On that basis, I move:

(a) address concerns about increased piracy by responding to the House of Representatives Standing Committee on Legal and Constitutional Affairs 2000 report on copyright enforcement Cracking down on copycats;

(b) adduce properly researched and credible evidence that the removal of parallel importation restrictions has resulted in lower music CD prices for consumers; and

(c) reform and simplify technical and regulatory guidelines that place strictures on the development of Australia's computer software and computer games industries”.

The DEPUTY SPEAKER (Ms Corcoran)—Is the amendment seconded?

Dr Emerson —I second the amendment and reserve my right to speak.