Beating The Australia Tax: How The Parliament Wants To Stop IT Rip-Offs

It has been months in the works, but the Australian Parliament finally outed its recommendations into how the government can best tackle the so-called Australia Tax, therefore halting the tech rip-offs being perpetrated onto Australian consumers. Most importantly, will these recommendations work?

The 150-page report contains a total of 10 recommendations to the Government, ranging from education campaigns through to law reform. Here are the 10 recommendations as presented in the report (snap to the bottom if you want to see our take on whether they’ll actually work):

Price discrimination and consumer impacts

Recommendation 1
The Committee recommends that the ABS develop a comprehensive program to monitor and report expenditure on IT products, hardware and software, both domestically and overseas, as well as the size and volume of the online retail market.

Recommendation 2
Considering the importance of IT products to education, and in the interests of greater transparency in this area, the Committee recommends that the Australian Government, in consultation with Universities Australia and CAUDIT, conduct a comprehensive study of the future IT needs of and costs faced by Australian Universities, in order to provide clearer financial parameters for negotiations.

Recommendation 3
The Committee recommends that the Australian Government consider a whole-of-government accessible IT procurement policy, to be developed by relevant agencies including AGIMO, and in consultation with relevant stakeholder groups including ACCAN.

Copyright, circumvention, competition, and remedies

Recommendation 4
The Committee recommends that the parallel importation restrictions still found in the Copyright Act 1968 (Cth) be lifted, and that the parallel importation defence in the Trade Marks Act 1995 (Cth) be reviewed and broadened to ensure it is effective in allowing the importation of genuine goods.

Recommendation 5
The Committee recommends that the Australian Government amend the Copyright Act’s section 10(1) anti-circumvention provisions to clarify and secure consumers’ rights to circumvent technological protection measures that control geographic market segmentation.

Recommendation 6
The Committee further recommends that the Australian Government investigate options to educate Australian consumers and businesses as to:
• the extent to which they may circumvent geoblocking mechanisms in order to access cheaper legitimate goods;
• the tools and techniques which they may use to do so; and
• the way in which their rights under the Australian Consumer Law
may be affected should they choose to do so.

Recommendation 7
The Committee recommends that the Australian Government, in conjunction with relevant agencies, consider the creation of a ‘right of resale’ in relation to digitally distributed content, and clarification of ‘fair use’ rights for consumers, businesses, and educational institutions, including restrictions on vendors’ ability to ‘lock’ digital content into a particular ecosystem.

Recommendation 8
The Committee recommends the repeal of section 51(3) of the Competition and Consumer Act 2010.

Recommendation 9
The Committee recommends that the Australian Government consider enacting a ban on geoblocking as an option of last resort, should persistent market failure exist in spite of the changes to the Competition and Consumer Act and the Copyright Act recommended in this report.

Recommendation 10
That the Australian Government investigate the feasibility of amending the Competition and Consumer Act so that contracts or terms of service which seek to enforce geoblocking are considered void.

Will It Work?

It’s worth pointing out first and foremost that these are only recommendations at this point. The government isn’t bound to change laws or go after Adobe, Apple or Microsoft with big sticks: it can ignore all the recommendations, enact some and dismiss others or enact all of them. It really falls to the government to decide.

Let’s say hypothetically-speaking that the government adopts all of the recommendations: what are the results we’d see in the Aussie gadget buying market?

Recommendation 1 is all about studying the costs that Aussies pay for gadgets, and reporting back to the Australian Bureau of Statistics to keep track of potential offenders. Recommendation 2 would see a broad research program into the costs of IT procurement in universities so that they can save money, while Recommendation 3 sees the Australian Government Information Management Office work on a whole-of-government IT procurement plan for penny-pinching IT contracts.

We’ve already seen how well the Microsoft testimony from the IT pricing inquiry affected a recent contract negotiation, with the government already reportedly saving $100 million by signing on the dotted line.

Recommendations 3-7 is where it gets meaty: the Inquiry recommends that through various legal and practical means, the Government get serious about allowing the circumvention of geoblocking enacted by multi-national companies like Adobe (for example), so that Aussies can take advantage of cheaper prices offered overseas.

The Inquiry doesn’t want companies to change prices in Australia, it just wants to make the strategy of gouging customers far less profitable in the long-run. If everyone knows how to beat a geoblock, companies are going to be both less likely to do it and earn less money from the gouge.

The real teeth in the report comes Recommendation 9, that encourages the government to flat-out ban the practice of geoblocking products in the Competition And Consumer Act and the Copyright Act.

In a world where all of these recommendations are actioned, the Australia Tax isn’t smashed entirely, but it will be circumvented for the majority of Australians shopping online.

Now for the storm-cloud:

Even if the Government does decide to take up the recommendations set by the inquiry, it’s a fair bet we won’t see change for some time or even at all because of two small but incredibly important words: Federal Election.

The 2013 Federal Election is coming at us like a political freight train overloaded with derp, and there’s no way we can escape it. The process of law reform takes months to complete, and with, at best, three months to the election, we’re not about to see law makers start reforming Acts any time soon.

Secondly, before an election the government is put into what’s known as “caretaker mode”, which is tantamount to setting the country on auto-pilot while the major parties duke it out in Western Sydney to see who will become the next head honcho of the world’s largest island. That auto-pilot procedure means that no new legislation can be passed, including law reform.

Plus, if there’s a change in government at the Federal Election, the new government might not think this an issue worth tackling within the first 100 days of office, potentially seeing the report and its recommendations stuffed into a drawer for at best, a while, or at worst, forever.

What we’re more likely to see in the next term of government is a serious crackdown on multi-national tech companies like Apple, Google and Microsoft whacked by the Federal Government for the lightness of their respective income tax cheques.

In his time as Chief Government Whip, Ed Husic MP took aim at multinational tech giants for allegedly dodging tax in the country, and seeing as how the purse-strings need to be tighter than ever these days in Treasury, it’s likely that a campaign towards tax revenue recoupment and loophole-closing legislation change would be pursued above an agenda to radically crack-down on companies charging Aussies a bit too much for their tech because of the direct revenue implications for the country. Why spend money when you can make it, after all?

We might sound a bit defeatist here, but we don’t want to take anything away from the extraordinary work done by the Parliamentary IT Pricing Inquiry and its members in delivering these 10 recommendations. On behalf of the gadget geeks of a grateful nation, Gizmodo Australia would like to thank Inquiry Chair Nick Champion MP, and deputy chair members, Paul Neville MP, Paul Fletcher MP, Ed Husic MP, Stephen Jones MP, Rob Oakeshott MP, Jane Prentice MP and Mike Symon MP.

Your work is appreciated.

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