he demise of Angus & Robertson and Borders book chains should be a wake-up call for the Gillard government to scrap trade import barriers forcing book retailers to be uncompetitive.
Even before factoring in postage costs and the appreciation of the Australian dollar, any Amazon.com customer knows retail books are expensive.
Under existing rules the Australian printing and publishing industry enjoys trade protection allowing it to block imports of copyrighted books if they’re published within 30 days of being released overseas.
The consequence is that Australian retailers cannot source cheaper printed books from overseas despite them providing royalties to the author.
Individual consumers are allowed, and clearly are importing cheaper equivalents, making it impossible for domestic retailers such as Angus & Robertson and Borders to compete on price.
The voluntary administration of the parent company of these ailing book chains, REDgroup, on Thursday didn’t need to occur had the Rudd government accepted the 2009 recommendations of the Productivity Commission.
At the time the commission recommended full liberalisation of book import restrictions, recognising they didn’t protect the copyright of authors and acted as protectionism for the publishing and printing industry.
At the time the only outspoken voice in the government for liberalisation was then consumer affairs minister Craig Emerson. Instead the government bowed to a campaign fronted by Melbourne University Press chief executive Louise Adler and a Labor arts set that maintained support for the existing regime.
This advocacy came despite the benefits flowing mostly to the two leading book printing businesses and multinational publishers who used import restrictions to boost profits. In particular they argued passionately that scrapping import restrictions would undermine the fostering of new Australian talent. Author Peter Carey hysterically described it as “cultural self-suicide”.
But as an indicator of the import restrictions’ success, no Australian author has won the prestigious Man Booker Prize for the best original English language literature novel since the present regime has been in place.
The same arguments were put by the music industry when the Howard government liberalised its import restrictions.
But industry data has since shown total royalties to Australian music writers and publishers has soared following liberalisation.
And the number of writers and publishers collecting royalties has doubled from 111,000 to 223,000.
Culture doesn’t flourish on the back of government protection.
This week’s release of the review of the Australian Independent Screen Production Sector into the film industry shows government support at record highs while the industry is bogged in a quagmire. Not even jobs are protected under the regime.
In its submission to the Productivity Commission inquiry that recommended import restrictions be abolished, the Printing Industry Association of Australia argued they protect 1600 printing jobs. It’s a far cry from the 2500 that will be lost if the REDgroup falls over.
Meanwhile, in the import restrictions-free New Zealand printing industry, jobs have stayed static since 1995 and the number of domestic publishers and books has increased. In Australia the printing industry has shed 10,000 jobs during the same timeframe.
It’s hardly surprising because cheaper prices result in greater consumption, requiring more printed and published books. But at present the government and industry are in denial, and consumers will pay the price.
The long-term threat to book retailers isn’t cheaply imported printed books but digitised ones on devices such as the Amazon Kindle. Electronic books cannot even be taxed at the border.
No doubt many consumers will continue to enjoy physical books. But faced with the choice of buying a high-priced locally made book and a cheaper electronic alternative they’ll almost certainly vote with their mouse clicks.
It’s precisely why industry should have started its process of adjustment.
Now, as Trade Minister, Emerson should use the REDgroup’s woes to fulfil his commitment to make Australia a unilateral liberaliser in the Hawke-Keating-Howard tradition by putting the scrapping of import restrictions back on the government’s agenda.