Thursday, November 10, 2011

Desperate booksellers giving up on protectionism

They have ripped off Australian book buyers for decades but this change of heart may be too late. Customers have got used to buying overseas. I have done so myself

THE Australian book industry has voluntarily agreed to a reduction in its protection against overseas imports but is 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.

An industry-wide strategy group, chaired by the former Hawke government minister Barry Jones, made the recommendations yesterday in a report designed to balance the survival of a local publishing industry with rapid technological change and consumer demands for quick delivery of cheaper books.

Receiving the report the Innovation Minister, Senator Kim Carr, sounded lukewarm about a recommendation to either impose GST on imported books or scrap it on Australian-produced volumes - a change many other domestic retailers facing competition from online sellers also want - saying "the taxation questions in the report are complex and would have to be discussed with Treasury."

But Mr Jones insisted the book industry had a special case for a GST reprieve because in many countries books were exempt from value added tax, unlike other items often bought online like clothes or shoes or jewellery, and that put Australian booksellers at an extra disadvantage.

As an example, he said, the hardcover edition of Stephanie Alexander's The Cook's Companion cost $130 in Australia, but could be bought for $92.83 from the Book Depository in Britain, including postage.

The disadvantage is compounded by different postage rates. It costs $42.60 to post a 10-kilogram parcel of books from Britain to Australia, but it would cost $237.50 to post them back. The report recommends the government urgently review Australia's international postal agreements.

Two years ago, sections of the Australian publishing industry fought off a proposal for legislation to make them publish works for which they held copyright within a week of their international release, winning a continuation of a 30-day shield from overseas import competition.

Senator Carr helped defeat that plan, which was pushed by the then competition minister, Craig Emerson, other ministers and some of the bigger booksellers.

But now the industry says "the caravan has moved on" - and publishers, booksellers and printers have agreed to cut the period during which they are shielded from overseas imports to 14 days, without legislative change.

Yesterday, Senator Carr said "if the industry says they have found a better way to achieve our aims then of course we'll take notice of that."

Australians spent about $2.3 billion on books in 2010, with 12 per cent of books bought online and half of those from overseas sellers. Of the purchases from overseas, 34 per cent were from Amazon and 19 per cent from the Book Depository. E-books made up only 1.5 per cent of sales, but a study by PwC Australia for the report found that could rise to between 6 and 25 per cent in just three years.

Other recommendations in the report include a request for about $5 million in government funding to help domestic booksellers set up an online database that would help them supply most books to customers within 48 hours and another $10 million over two years to subsidise scholarly publications by universities and their marketing.

Senator Carr said the government would respond to the report early next year.


Carbon casualties - three million families will suffer under new carbon tax regime

THE Samuelsons are the face of the carbon tax three million - the families who will bear the cost of the Gillard government's latest levy.

Teddy Samuelson and her husband Nik from Castle Hill will be out of pocket about $700 a year even after receiving increased family payments of about $75, The Daily Telegraph reported.

The stay-at-home mum said her husband worked "bloody hard for his money" with the family battling existing expenses and the cost of raising three boys in Sydney on Mr Samuelson's wage of more than $150,000 a year.

"When I look at bills I think what we pay now is more than enough - to think that number is going to rise is just wrong," Mrs Samuelson said yesterday. "I don't think anyone is really sure how much the tax is going to impact their lives."

She said the concept of taxing families who are earning more but not compensating them was unfair: "I don't see why we have to suffer because he earns slightly more."

While the increased financial burden will hurt, it was the way the government handled the policy which frustrated the Samuelsons most: "I don't believe the Australian public should pay for big business's carbon emissions. "A lot of the debate is based on inconclusive scientific evidence ... we don't really get a say in anything any more."

The almost three million Australian households who will either not be compensated or will get only partial assistance includes single-income parents earning $65,000 or more and singles on more than $55,000.

Treasurer Wayne Swan yesterday provided an example of parents on a dual income totalling $85,000 with two young children who would be $375 a year better off. But that will be paid for in part by families earning more.

The highest income earners - on $200,000 a year - will be out of pocket more than $1000 a year. At the other end of the spectrum, four million low-income households will be better off and two million will be fully compensated.

The government yesterday declared the debate over. Prime Minister Julia Gillard said in a speech to a carbon expo in Melbourne: "The time for words ended yesterday." After a standing ovation, Ms Gillard said "a second industrial revolution is needed" and carbon pricing was the "key that unlocks the door to a clean energy future".


Independent school starts fee war

AN independent school has fired the latest salvo in Sydney's "school wars" as debate heats up over whether families should be given more choice between government and private schools.

Mamre Anglican School at Kemps Creek is claiming a national first by slashing fees by 10 per cent in 2012 to help low-income families and lift enrolments - which have already soared 60 per cent over the past three years.

While debate rages over whether governments should encourage more choice in education, new independents such as Mamre Anglican are luring families away from both public and other private schools.

A national inquiry is under way into school funding but, whatever recommendations emerge, governments will have to make a call on the extent to which they bolster under-funded public schools or bankroll the growth of private schools.

Low-fee Anglican schools are booming in suburban growth corridors, strategically buying up land, heavily marketing in existing schools - and now cutting fees.

Enrolments at Mamre - which charges $3380 to $4480 a year plus $660 to $980 for excursions, camps and transport - could reach 300 next year and 500 down the track.

"The board of the school has taken the decision to lower the fees of the school by 10 per cent for 2012, I would think we would be the only school in Australia to do this," principal Vic Branson said yesterday.

"We are doing so because of a thorough demographic study which indicated ... the community would struggle with our present rate of fees and because we are already growing. We want others to join our school with its innovative programs. We feel that lower fees would encourage new families."

Mr Branson said the newly renovated school was attractive to families, with sport development and gifted and talented students programs, and recently placed 14th out of 250 schools in the Mathematics Olympiad.

Mamre takes students from kindergarten to Year 10.

Sydney Anglican Schools Corporation chief executive Laurie Scandrett said Mamre's reduced fees would bring it "into line with competitors".

The corporation has 16 schools in the Sydney Diocese and more are in the pipeline.


Mining tax debacle?

PRESSURE is building on the Gillard government to release the figures supplied to it by the minerals giants that were used to underpin its mining tax revenue forecasts of $11.1 billion over the next four years.

The opposition stepped up the call yesterday as it joined forces with Andrew Forrest's Fortescue Metals Group in claiming the big miners, including Mr Forrest's company, would pay next to no mining tax, leaving a massive hole in the budget.

The government, Treasury and the minerals giants that negotiated the tax disputed the claims, which emerged as Mr Forrest's senior executives told a parliamentary inquiry yesterday that Fortescue Metals had never paid any company tax. It would do so for the first time in December, when it expected to pay $100 million on a $1.3 billion profit. Previously, the company has been deducting its start-up costs.

Mr Forrest is the most vocal opponent of the mining tax and the government says he just does not want to pay tax. It leapt on the admission yesterday that he had never paid company tax.

It is eager to discredit Mr Forrest's claims about the mining tax because he has won over the Tasmanian independent, Andrew Wilkie, whose support for the legislation is critical.

Mr Wilkie shares Mr Forrest's concerns that the tax burden will fall disproportionately on small miners with which Fortescue Metals does business.

The big miners will pay nothing, Fortescue Metals says, because they can deduct from their tax liability the market value of their mineral assets.

Mr Forrest has changed his view on how the tax will affect his company. In June, he said "companies like Fortescue will have to carry the burden of the minerals resources rent tax" but recently he said his company, like the minerals giants, BHP Billiton, Rio Tinto and Xstrata, would pay next to nothing.

A Fortescue Metals executive Julian Tapp, said the company expected to pay "not much" mining tax and based on this, neither would the big three miners who negotiated the tax with the government. "We basically think when it comes to the agreement, the government have been sold a pup," Mr Tapp said.

The revenue forecasts for the tax are based on estimates of volume and revenue that were provided by the big three miners during negotiations after the original resources super profits tax fell over. The government is refusing to make these numbers public because they are commercially sensitive and were provided on a confidential basis.

Treasury officials appearing before yesterday's hearing again backed the revenue forecasts but admitted Treasury was not part of the original negotiations, which involved just ministers.

The shadow treasurer, Joe Hockey, said yesterday that Mr Forrest was right and that the mining tax would produce no revenue at all.

The head of the Minerals Council of Australia, Mitch Hooke, who represents the minerals giants, said Mr Forrest was wrong and the big three would pay up to 90 per cent of the tax.

The minerals giants did not like the tax but it was a marked improvement on the original and they could live with it, Mr Hooke said.

The Prime Minister, Julia Gillard, was in Melbourne yesterday, promoting the price on carbon, the legislation for which passed the Senate on Tuesday.


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