Senator COONAN (Minister for Revenue and Assistant Treasurer) (4:26 PM) —I move:

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

The Copyright Amendment (Parallel Importation) Bill 2002 further demonstrates the coalition Government's willingness to act in the best interests of consumers, the education sector and business.

The central aim of the bill is to improve access to a wide range of software products and printed material on a fair, competitive basis by permitting the parallel importation of such goods.

`Parallel importation' is the commercial importation of non-pirate copyright material without the permission of the Australian copyright holder.

At present, software products and printed material (books, periodical publications and printed music) are not subject to open and genuine competition.

This is because copyright law allows local rights holders to control importation of these products.

This has significant implications for Australian consumers and businesses as Australia is a net importer of copyright material.

The bill offers the prospect of cheaper prices and increased availability of products for all Australians, but especially for small businesses, parents and the education sector.

Unlike the Labor Party's `use it or lose it' policy, the Government's policy is not about benefiting foreign rights holders, and maintaining import restrictions and monopoly distributions at the expense of Australian businesses and consumers.

Many argued in 1998 that the relaxation of parallel importation restrictions for sound recordings would devastate the Australian music industry.

But, the industry is in good shape and there is no evidence of the claimed 50,000 job losses.

The recording industry grew after the 1998 reforms, with reports of around 2.9 per cent growth in 1999 alone.

Many top selling CDs are over 30 per cent cheaper (and sometimes less than half-price) than prior to parallel importation.

This is despite impact of the GST and unfavourable exchange rates.

Claims were also made that piracy rates would soar as a result of the CD reforms, and similar claims are likely in relation to software.

In a report in January 2000 the Australian Institute of Criminology, on the available data, could find `little evidence of the increase in CD piracy predicted by opponents of liberalisation'.

According to published industry statistics, Australia has comparatively low software and sound recording piracy rates.

Industry data on software piracy rates in New Zealand has recorded a decrease in the piracy rate since the introduction of parallel importation there.

Books

To enable maximum community access to competitively priced products, the bill permits parallel importation of all major forms of printed material.

A 1999 review by the Australian Competition and Consumer Commission (ACCC) found that for best selling paperback fiction, the price difference between Australia and the USA had exceeded 30 per cent on average over the previous four years.

As recommended by the Intellectual Property & Competition Review Committee, the printed material provisions will be delayed for 12 months to allow the book industry to undertake contractual adjustments.

The Committee noted that it had not been provided with any evidence to substantiate printing industry claims in relation to the beneficial effects of keeping the current restrictions.

Software products

The bill allows parallel importation of all software products including business, education and home software and pay-per-play video arcade machines.

A 1999 ACCC report recorded that over the past 10 years, Australian businesses and consumers have had to pay an average of 27 per cent more for packaged business software than their US counterparts.

Coverage

Some Australian rightsholders have attempted to prevent parallel importation of sound recordings by relying on the copyright in secondary material included on the music CD.

This bill will close this loophole by allowing parallel importation of copyright protected `accessories' other than feature films.

As the Government has not fully assessed the impacts of allowing the full parallel importation of `cinematograph film' on the Australian industry or consumers, the bill does not allow the parallel importation of `feature film'.

Enforcement Provisions

To assist copyright owners to enforce their rights under the changed arrangements the bill gives them substantial procedural assistance.

It provides amendments so that, as for sound recordings, in civil importation action involving software or printed material, the defendant will bear the onus of establishing that a parallel imported copy is not an infringing copy.

In addition, criminal penalties for infringement of copyright are severe, including up to five years imprisonment for each offence.

Conclusion

This bill will open up new business opportunities and allow easier fulfilment of specialist needs.

It balances the needs of copyright owners and copyright users.

Copyright owners will continue to be fairly remunerated, but in the context of a global marketplace.

Australian consumers and businesses will be able to get the best deal on legitimate printed material and software products.

Debate (on motion by Senator Buckland) adjourned.

Ordered that the resumption of the debate be made an order of the day for a later hour.