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Debate over the price of compact discs.

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MARK COLVIN:  Do you want to pay less than $31 dollars for a first-release compact disk?  Then according to the report of a Senate inquiry tabled tonight, you should support the Government’s legislation aimed at ending the stranglehold over the import of CDs enjoyed by the big Australian distributors.  But the Democrats, through Senator Natasha Stott Despoja, have already signalled that they’ll oppose the legislation.  Shortly, we’ll hear from Senator Stott Despoja and the Chairman of the committee of inquiry, Senator Eric Abetz.


But first, our economics correspondent, Peter Martin, reports on some of the drama leading up to the tabling of the report.


PETER MARTIN:  Back in the 1980s, redneck American politicians smashed Japanese transistor radios in protest against what you or I might call free trade.  Today, outside Parliament House in Canberra, it was the record distributors smashing CDs.  The Government says if it ends their monopoly on importing CDs, prices will be lower, and whether or not that’s true, the distributors are acting as if they have a lot to lose.  The Committee’s Chairman, Senator Abetz, concedes he is worried by the campaign.


ERIC ABETZ:  Unfortunately, there are vested interests who are hell-bent on ensuring that the consumers don’t get the benefit of cheaper prices and greater choice.


PETER MARTIN: Do you see that in any way as evidence that ending the import monopoly will lead to lower prices;  the fact that someone is prepared to spend an awful lot of money campaigning against the move?


ERIC ABETZ: Well, I think that’s the only logical conclusion that can be drawn from the events over the past few months during the hearings into this particular piece of legislation.  When you’ve got companies such as Woolworths, a major retailer;  you’ve got the ACCC that speaks on behalf of consumers and competition;  when you’ve got the Australian Consumers Association all coming out in support of the Government - and might I add, the Australian Consumers Association also refers to a number of small businesses who favour these changes but were too scared to come out publicly in support of the Government’s legislation.  And just to quote the evidence from one such operator:  ‘I operate an inner-Sydney CD shop but I can’t disclose which one because the wrath of the record companies could come down on my shop.’  And that’s not me making it up.  That’s the Australian Consumers Association giving evidence to the committee.


NATASHA STOTT DESPOJA:  Everybody would like cheaper CD prices but, unfortunately, the Government has failed to substantiate its position and its mantra that this legislation and changes to copyright law would result in cheaper CD prices.


ERIC ABETZ: Evaluating the evidence is something that Senator Stott Despoja has not done.  She has not fronted to any single one of the hearings that my committee conducted.  And secondly, the Democrats did consider and evaluate the issue of parallel importing in relation to copyright, and Senator Andrew Murray ….


PETER MARTIN: This is in an earlier report, is it?


ERIC ABETZ: That’s right.  And Senator Andrew Murray gave a very concise description of parallel importing as late as October 1997 in which he said parallel importing does not attack the owners’ propriety interest in a brand;  it attacks the exclusive or restricted right to import that brand.  And then he made a comment saying that Australian Democrats are opposed to oppressive, unnecessarily restrictive, predatory or cartel-like market behaviour which can result from abuse of the protection afforded by copyright.


NATASHA STOTT DESPOJA: Unlike Senator Abetz, I’ve got half a dozen portfolio responsibilities and no, we had a Democrat Senator present at the majority of those committee hearings.  I was at the Constitutional Convention.  But look, I’ve read through the Hansard .  I’ve met with every group Senator Abetz has met with and possibly more, and this has occupied my time since late last year, and I am very offended by the notion that I haven’t evaluated the facts and figures when I’ve read everything that Senator Abetz has read.


PETER MARTIN:  What about that other point that the Democrats in other circumstances are against import monopolies?  The Democrats in other circumstances side with the Consumers Association.  The Democrats in many other circumstances side with the ACCC where it’s talking about consumer issues.


NATASHA STOTT DESPOJA: We have never said that this is a black and white issue.  We’ve said that copyright regimes, as they relate to different industry, must be assessed on their merits and that is exactly what we’ve done.  We’ve balanced individual protections with community interest.


PETER MARTIN: How would lower prices cut royalties?


NATASHA STOTT DESPOJA: The concern that we have is that people will be undercut as a consequence of not just a so-called competitive price war, but people would actually have to deal with their work, their intellectual property being sold by pirates, by people who didn’t necessarily pay ….


PETER MARTIN: No.  Aside from piracy which is illegal, how would allowing legal imports and any lower prices that resulted cut royalties to artists?


NATASHA STOTT DESPOJA: Well, at this stage, the Government failed to include, in its copyright law changes, any mechanisms to ensure that royalties would be paid, but it didn’t address the issue of the possibility that royalties would be delayed, because there is no guarantee that the copyright owner, by virtue of being paid in a different country or at a different time, there is no guarantee that those royalties would be paid on time to the owner of that copyright.


PETER MARTIN: So you’re not certain that Australian artists would get less money for their work?


NATASHA STOTT DESPOJA: Well, I do believe that some of the evidence was compelling in relation to the potential of copyright of royalty reductions.  Yes, I do believe that.  They haven’t convinced part of the Senate Committee and they haven’t convinced the industry whose livelihood depends on this that they’ve got a case.


PETER MARTIN: Thank you both very much.


MARK COLVIN: The Chairman of the Senate CD inquiry, Senator Eric Abetz, and the Democrats Senator Stott Despoja were speaking to Peter Martin.