Productivity Commission on parallel imports (books)

The Productivity Commission’s report has been released:

Copyright Restrictions on the Parallel Importation of Books

Key Points

Media Release

On a quick view, now they recommend repeal after a 3 year transition period:

Whereas the Commission’s draft report had proposed a partial liberalisation of the import restrictions, following further evidence, the final report recommends their repeal, with the industry having a period of three years to adjust before the changes take effect. The report recommends that the current range of grants and other financial assistance be refined to better target the local writing and publishing that adds cultural value to Australian society.

The Commission estimates that, while Australian authors and publishers do benefit from the restrictions, overseas authors and publishers benefit by a factor of 1.5 times. In addition to the transfer from consumers to authors/publishers (including those foreigners whom we could easily free ride on), there are also other inefficiencies.

On the question of subsidies:

For the reasons set out in chapter 7, the Commission has not recommended that the assistance provided by the PIRs [that’s parallel import restrictions] be replaced by subsidies.

It has, however, recommended that current subsidies for the local books industry be reviewed ahead of the abolition of the PIRs, and that the arrangements be reviewed again five years after their repeal. These reviews will provide an opportunity to consider the appropriateness of the existing subsidies and whether they might be improved. Among other things, such reviews could examine the case for changing some of the current subsidies to more directly assist outputs that generate cultural externalities.

For the reasons set out in chapter 7, the Commission has not recommended that the
assistance provided by the PIRs be replaced by subsidies.
It has, however, recommended that current subsidies for the local books industry be
reviewed ahead of the abolition of the PIRs, and that the arrangements be reviewed
again five years after their repeal. These reviews will provide an opportunity to
consider the appropriateness of the existing subsidies and whether they might be
improved. Among other things, such reviews could examine the case for changing
some of the current subsidies to more directly assist outputs that generate cultural
externalities.

I wonder, has anyone done a study of how far the price of CDs or computer software fell after they became open markets? Speaking purely ad hoc, and unempirically, it always seems that computer programs, at least, are cheaper “over there”. Don’t have any experience with music.

Lid dip: Peter AP Clarke