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Thursday, 18 June 2015
Page: 3942

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Senator PAYNE (New South WalesMinister for Human Services) (16:31): I table a revised explanatory memorandum relating to the Copyright Amendment (Online Infringement) Bill 2015 and» «move» :

That these bills «be» «now» «read» «a» «second» «time .

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

Leave granted.

The speeches read as follows—

COPYRIGHT AMENDMENT (ONLINE INFRINGEMENT) BILL 2015

The Copyright Amendment (Online Infringement) Bill 2015 amends the Copyright Act 1968 to provide an effective new measure to target widespread online copyright infringement in Australia.

Significance of the creative industries and copyright challenges

Copyright protection provides an essential mechanism for ensuring the viability and success of creative industries by providing an incentive for and a reward to creators.

It is Parliament's duty to navigate an appropriate balance between, on the one hand, creators and owners of copyrighted works and, on the other hand, users and disseminators of copyrighted works. As history records, however, neat distinctions between the membership of apparently closed classes is not clear cut: members of a 'content creator' class might just as easily see themselves, depending on the circumstances, as advocates for wider access to copyrighted works.

What is undeniable is that Australia possesses a proud and valuable content creating sector. Australia's creative industries make a significant contribution to Australia's economy. According to a 2012 report, Australia's creative industries employ 900,000 people and generate economic value of more than $90 Billion, including $7 Billion in exports. The Government will continue to ensure that these industries have adequate protections to enforce their rights.

The internet has created major challenges for copyright protection. Material can be accessed, copied and shared with ease. In many instances this is a good thing and has helped promote education and freedom of speech. But a collateral effect of technological changes of this kind has been to exacerbate an indifference to the rights of copyright owners among some internet users and an expectation amongst some that content should in every respect be free. In many cases of course free access to content is lawful and proper, and as such is provided for expressly under exceptions to infringement in the Copyright Act. Nevertheless, the policy reasons - indeed the philosophical reasons—why society protects intellectual property are platform neutral. They did not change with the invention of the internet.

The flagrant disregard however of the rights of copyright owners is wrong - both legally and morally. In this regard it has become apparent that a gap in Australia's current legislative framework has opened insofar as existing copyright law is not adequate to deter a specific type of current activity: the facilitating of the infringement online of copyright owners content (largely of audio-visual material). Hence Parliament recognises that a specific remedy is required.

There are a number of foreign-based online locations that disseminate large amounts of infringing content to Australian internet users. These online locations are currently able to operate without disruption and profit to a large extent from facilitating the streaming and downloading by end users of infringing copies of audio-visual material. What they do, in unlawfully accessing and then profiting from the intellectual and artistic endeavours of others, is a form of theft. Some of these online locations are run by criminal gangs who use profits for other illegal purposes.

Rights holders face a number of practical barriers in enforcing their rights. At present, an injunction can only be awarded by a court after lengthy and costly civil proceedings. The widespread scale of infringement means that it is often not viable for rights holders to enforce their rights against individual users.

New injunctions power

This Bill will provide a powerful new mechanism to protect the legitimate interests of rights-holders, by enabling infringing material to be blocked by a carriage service provider without the need to establish fault on the part of that provider. Specifically, the Bill will introduce a new provision that allows rights holders to apply to the Federal Court for an order directing a carriage service provider to disable access to infringing online locations located outside Australia.

This type of provision is working well in other parts of the world, such as the United Kingdom, Ireland and Singapore. An injunction is often ordered in these jurisdictions without any opposition from ISPs.

This provision will apply on a no-fault basis against the carriage service provider. This recognises that while carriage service providers are not necessarily responsible for infringing online locations, they are best placed to prevent Australian internet users from accessing them.

The provision will not apply to online locations in Australia, since rights holders can take direct action against these online locations through existing remedies in the Copyright Act.

Balancing competing interests

The Bill recognises that there is a need to balance the important goal of protecting our creative industries against other vital public and private interests.

The Bill therefore contains a number of safeguards to ensure that the power is not used to curb these interests.

First, the power is only as broad as it needs to be to achieve its objectives. The provision will only capture online locations where it can be established that the primary purpose of the location is to infringe, or facilitate the infringement of, copyright. This is a significant threshold test which will ensure that the provision cannot be used to target online locations that are mainly devoted to a legitimate purpose.

Second, the court must consider a broad range of factors that reflect competing public and private interests.

The court must consider the flagrancy of the infringement. This provision particularly contemplates online locations that deliberately and conspicuously flout copyright laws.

The court must also consider whether blocking access to the online location is a proportionate response in the circumstances. For example, the court may consider the percentage of infringing content on the online location compared to the legitimate content, or the frequency with which the infringing material is accessed by subscribers in Australia.

Another consideration for the court is the overall public interest. The internet has revolutionised our ability to disseminate information and knowledge. The court must weigh the public interest in access to information against the public interest in protecting our creative industries. These competing public interests must themselves be considered in the wider context of the private interest which it is the principal purpose of this Bill to protect - ie, the right of content creators to the protection of their intellectual property.

Another important factor is the impact of the application for an injunction on any person affected. This includes, in particular, the carriage service provider.

The court will also need to consider whether there are procedural safeguards to ensure that affected operators of online locations will have an avenue to make their case. The Bill requires the copyright owner to notify the CSP and the operator of an application as soon as practicable. The operator may then seek to be joined as a party to the proceedings.

Consultation

Extensive consultation has been conducted on this measure. On 30 July last year, the Attorney-General and I jointly released the Online Copyright Infringement Discussion Paper for public consultation. A number of submissions directly addressed this proposal.

As a result of this consultation, this measure was modified to give more flexibility to courts in determining whether to order an injunction, to capture future infringing technologies, and to provide more safeguards for carriage service providers, operators of online locations and internet users.

The new injunction power is one measure that this Government is introducing to address online copyright infringement. International experience shows that a range of measures are needed to properly tackle this problem.

The new injunction power will complement the industry code that is being developed by internet service providers and rights holders. When finalised, the code will create an education notice scheme that will warn alleged infringers and give them information about legitimate alternatives. An injunction provision will be even more effective if users are properly educated and warned about online copyright infringement.

Conclusion

The Government is also encouraging rights holders to provide access to their content in a timely and affordable way. The Government accepts that this is an important element in any package of measures to address online copyright infringement. The Government also welcomes recent action by rights holders and expects industry to continue to respond to this demand from consumers in the digital market.

This Bill complements these objectives by ensuring there is fair protection of the rights of content creators, while balancing other competing interests in the online environment. This will be achieved by ensuring copyright holders have access to an effective remedy without unduly burdening carriage service providers or unnecessarily regulating the behaviour of consumers.

TAX AND SUPERANNUATION LAWS AMENDMENT (2015 MEASURES NO.3) BILL 2015

Today I introduce a bill to amend the Income Tax Assessment Act 1997 as a step towards repairing the Budget.

In our first Budget, we announced a plan to repair Australia's financial situation: a plan that makes important government services sustainable and stops borrowing at the expense of future taxpayers.

This Government is committed to a stronger and sustainable economy. We are committed to prioritising investment and making tough decisions on spending, so that we can redirect funding to where it most benefits Australia.

The measures in this bill will return around $826 million to the Budget over the forward estimates period in fiscal balance terms.

These are important savings for Australia's Budget, and we believe that the proposed changes are fair and measured.

We inherited from Labor an unsustainable budget position. The former Government's economic management is reflected in the deficits they delivered, the six biggest in Australia's history — a quarter of a trillion dollars in actual deficits.

Contrast that shameful record with the Howard Government's successful economic management which consistently produced Budget surpluses of 1 per cent of Gross Domestic Product.

Before we came to office, the Coalition recognised that taxpayers could receive better value for money from their Government, and that is what we pledged to do when we were elected.

We have already put a number of measures in place to make good on that promise.

They include the savings measures included in our first Budget and our continuing efforts to both place government finances on a sustainable path and improve workforce participation.

They set the scene.

This bill is a further step towards repairing the Budget and providing taxpayers with value for money from the Government.

And the measures we are introducing in this bill contribute to restoring a sound economic framework.

This Government will make sure that our taxation and spending policies meet our needs as a nation and also allow our economy to withstand any adverse, external shocks.

So we will continue to make sure that taxpayers' funds are spent wisely. Australians have every right to expect this from their governments.

There are two measures in this bill.

Schedule 1: Abolish the Seafarer Tax Offset

The seafarer tax offset is a refundable tax offset provided to eligible companies for 30 per cent of salary, wages and allowances paid to Australian resident seafarers who are employed to undertake overseas voyages on qualifying vessels.

Companies are eligible to claim the seafarer tax offset if the company employs the Australian seafarer on such voyages for at least 91 days in the income year.

When the former government introduced the seafarer tax offset, they claimed it would stimulate opportunities for Australian seafarers to be employed on overseas voyages and to gain maritime skills.

We are abolishing the seafarer tax offset because it is not achieving this policy intent. We will not continue to spend on policies that just don't work.

The repeal of the seafarer tax offset will apply to assessments for 2015-16 and later income years.

Only five certificates were issued by the Department of Infrastructure and Regional Development for companies seeking eligibility to claim the seafarer tax offset in 2014.

The Australian Taxation Office estimates that fewer than five companies will be affected by the abolition of the seafarer tax offset.

The low uptake of the offset may be due to several reasons, including the fact that there are significant differences between Australian wages and conditions in the shipping industry and those of some other countries. The seafarer tax offset is unlikely to be sufficient to address these differences.

Abolishing this offset is expected to return to the Budget bottom line $16 million over the forward estimates period.

And that's another small step towards repairing the budget.

It's also a step towards simplifying coastal shipping regulation in Australia.

Full details of the measure are contained in the explanatory memorandum.

Schedule 2: Reducing the tax offsets under the Research and Development Tax Incentive

We are also reducing the rates of the tax offsets available under the Research and Development Tax Incentive.

The rates will be reduced by 1.5 percentage points for all income years commencing on or after 1 July 2014.

Changing the offset will not affect the eligibility of companies for the R&D tax incentive, or the way companies claim the incentive.

Nor will the changes affect the administration of the R&D tax incentive more generally.

The R&D tax incentive will continue to provide generous, easy-to-access support for thousands of eligible companies in all sectors of the Australian economy.

The amendments included in this bill are in addition to the amendments to the R&D tax incentive in the Tax Laws Amendment (Research and Development) Act 2015, which received Royal Assent on 5 March 2015.

In repairing the Budget, this Government will build a stronger economic base — a stronger framework — which will give businesses confidence to invest in the R&D they need to help their businesses reach their potential.

The gain to revenue and savings from this measure will be around $810 million over the forward estimates. This will contribute significantly to the Government's task of repairing the budget — a task which will benefit every Australian taxpayer.

Full details of the measure are contained in the explanatory memorandum.

Conclusion

The measures in this bill are responsible. They represent another instalment in our Economic Action Strategy towards a stronger, better and more compassionate Australia.

This bill might seem like a small chapter in this story — but it's a significant element in reducing our debt. As a Government we recognise that we cannot continue borrowing $100 million every day to pay the interest on Labor's debt.

The measures in this bill will return around $826 million to the Budget over the forward estimates in fiscal balance terms.

These measures represent a careful and measured approach to re-prioritising government revenue.

This Government will continue to make the right decisions to position Australia for future opportunities and challenges.

Debate adjourned.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.