Forget books, deregulate car imports

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By Leith van Onselen

A group of published economists has called upon the Government to implement the Harper Competition Review’s recommendation to lift the ban on parallel imports of books. From Fairfax:

Ten economists have signed an open letter claiming Australia’s intellectual culture has been stymied by the high relative price of books sold here, and that the system is harming their interests as authors…

“The current parallel import ban on books, including those by Australian authors, makes all books less affordable,” the letter says.

“This means fewer Australian-authored books are read, harming our country’s culture. This policy hardly benefits Australian authors, as 90 per cent of the increased prices end up going to book stores and publishers, many of which are foreign owned.

“We, as book authors ourselves, think the parallel import ban harms our interests and our readers’ interests. As authors and economists, we call on Parliament to finally lift the ban on parallel imports so that more Australian books are read.”

While I endorse parallel book importation, I can’t help but feel that it is a bit of a non-issue. Thanks to online retailers like Booktopia and Fishpond, cheap imports can easily be purchased from within Australia.

Just last month I purchased a brand new copy of The Adventures of Huckleberry Finn from the US, which only cost $8 including freight. I recently also purchased a copy of That Sugar Book for $20 from the UK (including freight), which was around half the cost of buying from an Australian book retailer.

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In short, there are loads of options for Australian consumers to purchase cheap imported books using the internet.

A bigger issue, in my view, is the ban on used (“grey”) car imports. Used cars are far more expensive in Australia than elsewhere and, unlike with books, there is no option for consumers to make purchases from abroad via the internet.

As I keep arguing, the local car assembly industry is scheduled to close in 2017. And once it does, the rationale for restricting used car imports will disappear. The Government should, therefore, follow New Zealand’s lead and allow grey imports, thus increasing consumers’ spending power and potentially lowering the average age of Australia’s vehicle fleet.

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To do otherwise is to continue screwing over Australian consumers for the benefit of new car dealers.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.