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Australian Society of Authors wants Democrats to reconsider GSTon books.



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PETER THOMPSON: There is a last-ditch attempt being made to save the humble book from being slapped with a GST. The Australian Society of Authors, or ASA, has written to each Democrats senator demanding they reconsider their position on the tax and vote against it. You will probably recall that 'no GST on books' was one of the Democrats' election promises.

 

The ASA's letter says Treasury information, used by the Democrats on the issue of books, is incorrect and urges a proper investigation into the impact of the GST on reading material. This comes as the Democrats hold their national executive meeting this weekend, ahead of next week's Senate vote on some of the tax amendments. With federal parliament, of course, wrapping up by 30 June and the Senate changing, all amendments will need to be pushed through by then, making the Society of Authors' novel cause seem probably lost.

 

Libby Gleeson chairs the Australian Society of Authors, and she joins us now from Sydney.

 

Libby, good morning to you.

 

LIBBY GLEESON: Good morning, Peter.

 

PETER THOMPSON: Are you banging your head against the proverbial book wall, here?

 

LIBBY GLEESON:   Well, Peter, look, I am one of those people that believes that until something's an absolutely signed-off done-deal, that you continue to make the arguments that you believe in.

 

PETER THOMPSON: What's your case?

 

LIBBY GLEESON:   The problem is that Senator Lees, the leader of the Democrats, has been quoted in public, a number of times, saying that only a very, very small number of books are going to be affected by the GST. And by that she means that these books will be going into institutions or into organisations which will have a zero rating - like, for example, books purchased by a school will be zero rated. But we can't, for the life of us, work out where these figures that she has come from because we have in front of us….

 

PETER THOMPSON: Can I just … stay here. The Democrats are saying that only 24 per cent of books will be subject to GST. Is that right?

 

LIBBY GLEESON:   Yes, that's the number that she said.

 

PETER THOMPSON: Presumably based on Treasury information?

 

LIBBY GLEESON:   Well, I am not quite sure where that will have come from. Because in a document called Cultural trends in Australia , which is a document that came out in 1995/96, and I think in the ABS statistics from only last year, we see quite clearly that the number of books that are not going into schools - so those that are the general consumer titles, which of course will include educational titles that you or I might buy for our kids outside of the school - that's 72 per cent of books. So they're the vast bulk of the books that are being purchased in the community and they will all be subject to GST.

 

PETER THOMPSON: There's a basic misunderstanding here by one side or the other. Either you're right or they're right; you both can't be right on this, obviously.

 

LIBBY GLEESON:   It would appear not. But we've had our stuff looked at. The book publishing industry is made up of four separate groups: there are the writers - that I lead, there's the printing organisations, the publishing organisations, and the book-selling organisations. And we have all being going through these figures, over the last three weeks, very, very carefully, and this is the stuff that we have come up with, and it's taken out of government publications.

 

PETER THOMPSON: Well, so what? Say if there is a GST affecting far more books than Senator Lees thinks might be the case, what impact would that have?

 

LIBBY GLEESON:   The impact is going to be quite devastating. As I say, the sector is made up of four separate groups and each one of us feels that it's going to be devastating on our particular section, making it into quite a crisis on the overall picture. The number of….

 

PETER THOMPSON:  But with respect to you, that's what any lobby group would say about their special interest.

 

LIBBY GLEESON:   Okay, overseas data suggests that there's an effect flow-on of roughly the same amount as the actual GST. So we have a 10 per cent GST, we can expect a significant decline in book purchasing. This follows data mainly from Canada, and it wears a 7 per cent GST and a 12 per cent decline in trade titles and a 26 per cent decline in educational titles. If that happens you will find….

 

PETER THOMPSON: Was that long term? Did that recover?

 

LIBBY GLEESON:   It recovered slightly but it certainly didn't go back to its pre-GST rates, and it's still, in effect, being felt there. Small publishers closed. You'll find that there will be no risk taking. The margins in publishing are so slight that you will find that the risky book, the innovative book, the new culturally significant title, the new title from a writer who is just beginning to make a career, they won't be published any longer. There'll be a far greater dependence on books that are predictable winners. Now, at the same time, small bookshops have, and specialist bookshops have, very small margins. We predict that they will close. And the added problem there is that book purchasing in Australia is varying, in the sense that a lot more purchasing is being done online. Amazon.com, or other organisations that sell books online, where there will be no GST….

 

PETER THOMPSON: Yes.

 

LIBBY GLEESON:   …are going to be the big winners.

 

PETER THOMPSON: Now, what about the Democrats senators? You have petitioned each of them. Have you had responses?

 

LIBBY GLEESON:   No, no responses as yet. This was done yesterday. I am optimistic that I might hear from some of them today.

 

PETER THOMPSON: They would say, in response, that there is an offer of $60 million a year, isn't there, over four years, for the publishing industry by way of compensation?

 

LIBBY GLEESON:   That's right. There is a compensation package being offered, and of course we welcome anything that's going to be of some assistance to the industry. But if you pull over $100,000 million out of an industry, in the amount of taxes that are going to be paid and the costs of administering, then to put back $60 million is certainly not going to alleviate the problem. We see this problem as really rippling through the community into areas of literacy and of reading, and there's very little way that you can fully compensate for that.

 

PETER THOMPSON: Libby Gleeson, thanks very much.

 

LIBBY GLEESON:   Thank you very much, Peter.

 

PETER THOMPSON: Libby chairs the Australian Society of Authors.