Australian schools pay $9 million each year to display web pages that are available freely on the internet. They are even charged for displaying thumbnail images of book covers on their school intranet sites.
They and other institutions pay another $11 million each year to collection agencies for the display of works whose authors can't be found, which the agencies then pool and distribute to members who weren't the authors.
Addressing a copyright forum at the National Library on Friday, the co-chair of the Productivity Commission's intellectual property inquiry, Karen Chester, said she regarded her recommendation that Australia adopt a US-style system of "fair use" as more important than the recommendation that Australia allow the free import of books.
Removing the remaining restrictions on importing books would cut prices by $25 million. On average books bought in Australia are 20 per cent more expensive than identical titles bought in places such as Britain.
Of the $25 million, $15 million flowed overseas.
"So it's hard not to view import restrictions as anything but the least effective way to support local authors, and perversely at the expense of local readers," she said.
"We did listen to the case made by locally based publishers that the additional money they make from import restrictions delivering them higher prices is then used to cross subsidise local authors."
"We requested this evidence - show us the money. But we were met with the sound of deafening silence."
However she said of the recommendations before the government, allowing "fair use" was far more important.
"We know with import restrictions that technology, the digital age and new business models have proved a great equaliser. Digital books and real time publishing will continue to discipline the price premium local publishers will extract. So perhaps where we find ourselves today, with import restrictions costing Australian readers around $25 million each year, is about as bad as it will get."
"The same cannot be said for our system of copyright exceptions. And here's the policy rub and where the greatest policy imperative looms largest for government. The inequities and costs the present system are growing and will continue to do so with technological and digital advances."
"Think, no access to data for data mining means no incentive to the workforce to develop those skills ??? skills which other jurisdictions are developing in spades."
"Think, hampering access to cloud computing means that Australian firms and families are left to use inefficient, antiquated systems in comparison to other markets and countries that can make use of the latest technology."
"Think, schools and universities not paying $9 million each year for material that is freely available."
"The Commission heard from Universities Australia about how institutions were reluctant to use material for Massive Open Online Courses because fair dealing might not extend to them."
"It's not just about the millions of lost export dollars of our universities. It's about what's needed to re-equip our workforce to remain relevant. A university student today will have 17 different jobs. Fair use is a policy lever to avoid the looming education divide of haves and have not's."
At present new uses of copyrighted material are presumed to break the law until Parliament gets around to changing it, which took until 2006 in the case of home taping of television programs.
In the United States, Singapore and Israel new uses are permitted on the condition that they are "fair", taking account of the purpose and nature of the use, how much is used, and whether or not it harms the market for the original work.
The Commission's report was delivered to the government in September and is with the Industry Minister Arthur Sinodinos.
