EXPLANATORY STATEMENT
Public Lending Right Act 1985
Public Lending Right Scheme 1997 (Modification No. 1 of 2011)
Issued by the authority of the Minister for the Arts.
The Public Lending Right Act 1985 (the Act) provides the legislative framework for a Public Lending Right (PLR) scheme to, amongst other things, recognise the loss of income by Australian creators and publishers of books held in public lending libraries. In
2009-10, payments totalling $8.324 million were made to 8998 claimants.
The Minister can make modifications to the Public Lending Rights Scheme 1997 (the Scheme) pursuant to paragraph 5(1)(b) of the Act.
The Public Lending Right Committee (the Committee), established under the Act, has certain functions in relation to the Scheme and provides advice to the Minister on the operation of the PLR Scheme. Taking into account the advice of the Committee, the Minister has determined to modify the Scheme as outlined in the modification instrument and explained this statement. Under section 8 of the Act the Minister may determine other functions for the Committee.
The Public Lending Right Scheme 1997 (Modification No. 1 of 2011) is a legislative instrument within the meaning of the Legislative Instruments Act 2003. The gazettal requirement in subsection 5(1) of the Act is taken to be satisfied if the instrument is registered in the Federal Register of Legislative Instruments (subsection 56(1) of the Legislative Instruments Act 2003).
Purpose of the Scheme
The Scheme sets out a process which the Committee must follow to determine the eligibility of persons to be creators or publishers under the Scheme and specifies how payments will be calculated and made to successful claimants.
Impact
The amendments to the Scheme refine its provisions to improve the administration of the Scheme, allow the Committee to determine the amount of both a minimum payment and a maximum payment to a claimant and to allow for a formal alignment, where appropriate, of eligibility provisions and other administrative provisions in the PLR Scheme with its companion lending rights program the Educational Lending Right (ELR) program. The ELR program provides for payments to eligible creators and publishers whose books are held in educational lending libraries. As most PLR applicants are also ELR applicants, consistency across the two schemes reduces complexity and provides greater certainty for applicants.
The amendments to certain definitions in the PLR scheme ensure that it is clear on the face of the Scheme that these definitions will be applied consistently between the two complementary lending right programs.
The savings provisions in section 30 of the Scheme ensure that the status of claims made for books under earlier schemes will maintain this status under the amended Scheme.
The changes to the Scheme are not intended to affect the eligibility status of creators or publishers if they had existing claims or made claims on or before 31 March 2010 in respect of payments that will be made in the 2010-2011 financial year or before 31 March 2011 in respect of payments that will be made in the 2011-2012 financial year. The modifications are only intended to apply to payments that would be made from the 2012-2013 financial year i.e. in relation to existing claims and claims received from 1 April 2011.
Therefore, payments made to claimants up until the financial year ending 30 June 2012 will be made in accordance with the arrangements that existed prior to this modification. However, following that, payments will be made in accordance with the Scheme as modified by this instrument.
Consultation
Consultation has been held with the Australian Society of Authors and the Australian Publishers Association which represents a large number of Australian authors and publishers.
Notes on Modifications
Part 1
Section 3 defines terms used in the Scheme. Except for the new definition, which is detailed below, the definitions used in the Scheme have not changed.
The inclusion of a definition of ‘book’ is to clarify that certain categories of material such as audio-visual kits, electronic books, magazines and other serial publications, are explicitly excluded from the Scheme. Such exclusions are consistent with the intent of the Act to focus the Scheme on what would normally be understood as books.
In addition, material designed for a single use, such as sticker books and workbooks, are excluded. These kinds of material are not considered to be the types of publications envisaged as being covered by the Act as they are designed to be used once by one person.
Paragraph (h) of the definition provides that the Committee may, by determination exclude other material from the Scheme. It is necessary to include such a provision to ensure material which falls outside the intent of the Act can be specifically enunciated in the Scheme so that claimants are aware of what publications are eligible. The Committee, which is appointed by the Minister under the Act and comprises representatives of Australian authors, the publishing industry and the library sector is well placed to determine what material should be excluded from the Scheme.
For the purposes of section 8 of the Act, the inclusion of this function for the Committee in the Scheme is a determination by the Minister of this additional function for the Committee. A determination under paragraph (h) is a legislative instrument within the definition of the Legislative Instruments Act 2003.
This amended definition of ‘book’ is consistent with the definition of the same term in the ELR program.
Part 2
Subsection 5(1) provides for the Committee to determine that an individual is the creator of a book. The Committee may have regard to matters set out in subsection 5(3) when doing so. Subsection 5(3) is being modified to include consideration of whether the creator has received payments in advance for royalties and has a significant continuing financial interest in the book. The introduction of these considerations is relevant to the objectives of the Act and the Scheme, which are to recognise a creator’s loss of income (eg. royalties) due to his or her books being held in a public lending library.
In its amended form, the provisions of this subsection are the same as the corresponding provisions for the ELR program. The alignment of such provisions between programs makes the consistent administration of both programs explicit on the face of the rules for each program.
Section 6 requires the Committee to determine if a person is an eligible publisher. Section 6 sets out a series of criteria which a person must meet in order to be an eligible publisher. This includes a requirement that a person must regularly publish books in Australia. The second objective of the PLR program is to support the enrichment of Australian culture by encouraging the growth and development of Australian writing and publishing. In order to support this objective, a definition of the term ‘regularly publishes’ has been introduced through the new subsections 6(4) and 6(5).
Subsection 10(1) has been amended so that it is consistent with the same requirements in the ELR program. This amended subsection primarily combines two former subsections 10(1) and 10(2). However, the requirement in paragraph 10(1)(f) for a book to have a minimum print run as determined by the Committee is a new requirement.
Practically, eligible claimants must be reasonably well represented in the collections of public libraries nationally in order to receive a payment under the Scheme. Evidence shows that in recent years over 1500 eligible claimants have not received an annual payment because their presence in the regular surveys of books in a sample of libraries was insufficient to generate a payment. The Committee’s capacity to set a minimum print run will assist potential claimants to judge the efficacy of making a claim and assist the Office for the Arts with the efficient administration of the Scheme. Given the expertise of the Committee as established by the Act, the Committee is well placed to set a minimum print run.
For the purposes of section 8 of the Act, the inclusion of this function for the Committee in the Scheme is a determination by the Minister of this additional function for the Committee. A determination under paragraph 10(1)(f) is a legislative instrument within the definition of the Legislative Instruments Act 2003.
The amended subsection 10(2) provides that a claim may only be submitted for a book within 5 years of the first publication of the book, or of a revised edition of that book. Experience shows that 7 years after publication, without a new edition, most books no longer score sufficiently well in the regular surveys of a sample of public lending libraries to result in a payment under the PLR Scheme. This is particularly the case with the movement in libraries to turn over their stock on a regular basis and their difficulty replacing copies of publications that have gone out of print. Allowing a claim to be submitted up to 5 years after the date of publication maximises the likelihood that a claim will result in a payment and minimises unnecessary administrative costs to both claimants the Office for the Arts in subsequent years when a payment may be less likely to be made.
Part 3
Section 16 is amended to allow the Minister to determine both the minimum and maximum payments to be made to claimants under the PLR Scheme based on recommendations from the Committee. Determination of levels rather than a set amount is preferable as determinations allow levels to be changed more readily over time as the cost of living increases.
The amended subsection 16(1) provides that if the total payment payable under the Scheme to a creator for a financial year is less than the minimum payment amount the amount is not payable and no credit will accrue. The former section 16 specified that the minimum payment amount was $50. The revised subsection 16(1) provides the Minister with the ability to review and determine the minimum payment amount.
The amended subsection 16(2) provides that the Committee may determine a maximum payment amount for claimants and that the maximum payment may be different for creators and publishers. As a consequence of the amended subsection 16(2) any amount in excess of the maximum payment is not payable and will not be accrued. There was no maximum payment in the Scheme immediately prior to this modification. One of the objectives of the Scheme is to encourage the growth and development of Australian writing and publishing. The introduction of a maximum will allow the funding to be better distributed among all eligible authors.
A determination under subsection 16(1) or subsection 16(2) is a legislative instrument within the definition of the Legislative Instruments Act 2003.
The amendments to section 16 retain in new subsection (6) the requirement that if none of the eligible creators are paid as a result of the operation of this section then neither will the publisher of the book. Subsections (2) and (3) of the Scheme immediately prior to this modification are retained in new subsections (4) and (5).
Subsection 16(5) of the Scheme immediately prior to this modification is no longer relevant as it related to the financial year ending on 30 June 1997 and as a result has not included.