Michael Peters

The book industry task force has suggested a series of recommendations to promote book selling in Australia.

However they have ignored the single piece of legislation which is driving Australia readers to buy books overseas.

I argue they have completely ignored the fixed retail price of books. Every other country in the world axed this anti-competitive legislation decades ago, but here in Australia we still have it. This means that in Australia we have to pay what the publisher wants to charge for books – overseas, the bookstores decide the price, and that drives prices down, increasing readers.

Now the recommendations made by the industry-wide strategy group, which is chaired by the former Hawke government minister Barry Jones, are that the Australian book industry voluntarily agree to a reduction in its protection against overseas imports, and also to asking the government to scrap GST on books and review unfair postage costs to help it compete, as readers flock to e-books and cheaper books available over the internet.

However this is a complete red herring. The federal government was on the verge of axing this anti-competitive legislation two years ago, but didn’t in the end because of pressure from book shops. Many of whom have now gone bust. They have simply shot themselves in the foot.

I have looked at the implications of removing GST on books, and it would be totally ineffective. Bookstores try to blame GST, rent, and high wages for their troubles. The real reason is anti-competitive behaviour. As I have told Canberra, we need to learn the lessons of the UK which axed the fixed retail price of books more than a decade ago, and saw a boom in publishing.

Michael Peters is a lecturer in Business Law and Taxation at the Australian School of Business.