Reforms proposed by the Book Industry Strategy Group are long overdue but don’t go far enough and may be difficult to implement, according to industry players and authors.
Yesterday the BISG publicly released its recommendations on how to revive an industry straddling the digital divide and struggling for survival. Innovation Minister Kim Carr — who was handed the report in September — has begun addressing the issues and established a printing and publishing network within his department.
Included in the recommendations — which took 12 months to complete — were a GST exemption on books and significant tax breaks for struggling writers.
“Senator Carr has a real challenge on his hands,” said Corrie Perkin, an independent bookshop owner and journalist, who suggested the minister will need to convince MPs and public servants across all levels of government the issue is worth acting on.
“I hope they all read books,” Perkin added.
Jon Page, general manager of Pages & Pages Booksellers, says the report was long overdue and the government needs to act fast. “The timeline is critical, we’re coming up to Christmas again. Changes need to be made now and not in another 12 months,” he said.
But Australian Publishers Association CEO Maree McCaskill says “business conditions and the financial climate puts its own timeline on it”. She calls it a fair and reasonable report: “I think it nails a lot of the points affecting the industry at the moment.”
Australia remains one of the only OECD nations to place a tax on books. Tim Coronel, publisher at leading industry mag Bookseller+Publisher, says “it would be a marvellous thing” to remove the GST — one of the BISG’s recommendations. But he concedes it’s unlikely to happen given the political climate.
And anyway, says author Sophie Cunningham, the abolishment of GST would have little impact because there is still a significant price difference between e-books and hard copies.
But Page said the government should even the playing field: “Either remove GST on books in Australia or start adding it to the 53% of books purchased [last year] through international online sellers.”
The taxation of books in Australia has long been a matter of debate within the industry. Neither Perkin nor Page understands why the tax exists.
“It would be great if they removed GST from books … I’ve never understood why they were considered a luxury item,” said Perkin. And Page: “A tax on books is a tax on knowledge.”
Another recommendation is for the government to legislate significant tax breaks for authors during periods of low income — similar to current tax exemptions for drought-hit farmers. Coronel notes even well-known Australian authors make little for publishing books.
However, Cunningham — a Melbourne-based writer who has just released a new book tracing the history and highlights of her home town — says the problems are more substantial and won’t be fixed by one piece of legislation.
Currently, a bookshop cannot order overseas stock if there is a local edition — even if it’s cheaper. Coronel says while bookshops can order individual books for customers, it prevents ordering in commercial quantities.
There’s dissatisfaction in the scope of recommendations and debate over who the winners will be. As Coronel noted: “I do know already that the book association has said a lot of the measures are helping publishing and printing, but not sellers and retailers.”
Page, too, is concerned “booksellers weren’t given the attention we were deserved”. “The publishers are equal and as important but we are the ones talking to the customers,” he said.
Reform could be useless if the industry doesn’t act together, according to McCaskill: “I am hopefully the industry as an entire sector will get on and work together to refine some of the issues.”
Getting rid of the parallel import restrictions would indeed be a good start, as would removing geographic limitations so Australians can buy ebooks by Australian authors. (The fact that geolims stop you doing that in the first place is frankly insane). Remove DRM from ebooks, don’t cut corners on editing and proofing, and charge a realistic price for the production and storage costs involved (which for ebooks are far less).
Also, prevent publishers slashing prices for huge retailers like Big W, while insisting bookshops sell at the RRP. Price-fixing by publishers (e.g. the infamous Agency 6 cartel on ebooks) is anti-competitive and a restriction on trade.
I have buckets of sympathy for the plight of booksellers in Australia, and believe that books should be exempt from GST, but Crikey’s interns need to do better than rewrite the industry’s lobbying points. As I understand it, the local edition restriction on retailers is not limitless – publishers have to publish a local edition within 30 days of overseas publication, otherwise the retailer can import.
More disappointing was the oft-repeated and completely false claim that Australia is “one of the only OECD nations to place a tax on books”. What rubbish. There are only two EU countries that have 0% VAT on books. All others range between 3% and 25%, with average of approx 8%. New Zealand charges 15%, and most other OECD countries apply a sales tax to books as well.
@CLYTIE Posted Thursday, 10 November 2011 at 7:36 pm | Permalink
Also, prevent publishers slashing prices for huge retailers like Big W, while insisting bookshops sell at the RRP. Price-fixing by publishers (e.g. the infamous Agency 6 cartel on ebooks) is anti-competitive and a restriction on trade.
I cannot agree on the removal of the PIR since that would be unilaterally removing copyright, which the big English publishing nations have not intention of doing. The remainders from any US print run of an Australian-authored book would be like a rounding error to them but would be bigger than our total sales–thus authors would be robbed pure and simple. (see my last word on this issue that so many readers continue to get wrong:
(crikey.com.au/2009/11/13/wheres-the-book-buyers-voice-in-this-pir-debate/)
As to your point (above), in fact France does this. They fix retail prices by law–I think they allow a 2.5% price reduction. They even regulate Sales–only allowed on two specified weeks of the year! (Or they used to; it is some time since I lived there.) The rationale is entirely to safeguard small bookstores against large ones. Amazon has caused them all kinds of problems–though as I discuss in today’s CDM they do apply TVA to Amazon imports–and I am not sure of how it is working out. Except that books are fairly expensive in France and I am sure Amazon is wildly popular. (There are quite a lot of English language bookstores in Paris but they are even more expensive!)
“”It would be great if they removed GST from books … I’ve never understood why they were considered a luxury item,””
Umm, they are goods. Since when did the Australian Goods and Services Tax only apply to “luxury items”.
If you want to see stampede of rent-seekers, remove the GST from books, and every industry that believes that their goods are under a similar threat, will be demanding a level playing field and the removal of tax from their products.
Do the UK, New Zealand and Canada really not charge GST or VAT on books?