Suppose that you had a reform that potentially would lead to consumer benefits of around half a billion per year that might stand to harm some 10,000 Australians with 10 percent of that total. So that interest group gets $5,000 each while costing the rest of us $450m. Seems like a no brainer especially if you had careful study, noted that these numbers were conservative and allowed a year of public submission and discussion. You might say the evidence was gathered.
Well, that wasn’t enough for the Rudd Government who completely ignored those calculations. They rejected the Productivity Commission’s analysis that parallel import restrictions on books be removed. They claimed, contrary to all evidence, that:
Australian book printing and publishing is under strong competitive pressure from international online booksellers such as Amazon and The Book Depository and the Government has formed the view that that this pressure is likely to intensify.
But think about that. If competition is strong, then those 10,000 Australian authors are not protected by parallel import laws. So all we have is the costs of enforcing it. Why some of them and their publishers are celebrating today, I don’t know. Actually, I do. They know they got price support and will be a protected industry for some time yet.
What is most disappointing is that it adds another chink in the Government as evidence-based sensible policy-maker and towards them being interest group protector. We have seen it in the CPRS and we are seeing it in books. The book interest group is polluting the economy with high prices just so they can scrape a small amount for themselves. What next?
PS. The half billion comes from total books sales ($2.5b) subtracting non-trade books (40%) and taking 35% of that (the low end premium charged over books sold overseas). The 10,000 represented the top end calculation of authors in Australia (and they don’t produce books each year) and the 10% is their likely share of trade book sales assuming neither publishers nor booksellers get a cut.