Friday, April 29, 2016

Authors, booksellers fear Productivity Commission plans to allow cheap foreign imports

Authors and booksellers have slammed a proposal by the Productivity Commission that would change rules preventing the unrestricted import of books into Australia.

In a report out today, the Commission says current import restrictions on books are the analogue equivalent of "geoblocking" - the same way that consumers are stopped from accessing overseas streaming sites like Netflix.

The Australian Society of Authors warns a flood cheap imported books would hurt Australian authors and threaten the two billion dollar industry.

Geoblocking encourages piracy and must end, Productivity Commission urges

Australian consumers should be able to legally circumvent geoblocking restrictions that block them from using foreign online streaming services like Netflix, according to the Productivity Commission.

In a draft report that urges a major overhaul of intellectual property laws, the Commission says geoblocking technology is "pervasive" and means Australians are offered a lower level of digital services locally and at a higher price.

Listen to my interview with the Productivity Commission's Karen Chester from this morning's AM

The report says Australian consumers should be able to access overseas streaming services like Netflix without the fear of infringing copyright laws and that the answer is not "big brother enforcement".

Read the full draft report

Karen Chester, a commissioner with the Productivity Commissioner, told AM that geoblocking restrictions have the opposite effect of encouraging internet piracy.

"Unless you've got a teenager that can help you get around the geoblocking, some people will be able to access and others won't," Ms Chester said.

"Those that won't will just breach copyright, do what we're all doing and get around the geoblock and access to the US Netflix or the Canadian Netflix.

"Making copyright material more accessible and more competitively priced online and not  geoblocking is the best antidote to copyright infringement."

Source: Productivity Commission
The practice of geoblocking blocks access on geographical borders but users circumvent the technology by setting up a virtual private network or VPN which masks their location and identity.

The Productivity Commission report says the Federal Government needs to send a clear message that it is not an infringement of copyright for consumers to evade geoblocking technology.

The government is also being urged to avoid entering international obligations or trade deals that support restrictions like geoblocking.

"People actually want to do the right thing. They're happy to pay for copyright but they want it now and they want it competitively priced," Ms Chester told AM.

Among a range of recommendations, the Productivity Commission says patents and copyright shelf lifes for books are no longer relevant to today's Internet connected world.

"You've got a system of intellectual property arrangements that were developed four centuries ago. Have they continued to keep up with the times?" Ms Chester said.

The report says copyright protection lasts too long and uses the example of an author writing a book today who lives for another 50 years being protected until 2136.

"Continuing to reward someone after they're resting in peace doesn't make a lot of sense," Ms Chester said.

Source: Productivity Commission

The Commission also wants an change to "fair use" provisions in copyright law saying the current laws are "too narrow and prescriptive" and don't reflect the way people consume content in today's digital world.

The report says updated fair use provisions would benefit schools, libraries and archives and would "foster certainty" for users.

Thursday, April 28, 2016

CommInsure whistleblower slams CBA probe into unethical practices

The corporate whistleblower who was sacked after speaking out about the scandal inside Comminsure says he has no faith in the Commonwealth Bank's ability to investigate itself.

Comminsure's former chief medical officer, Dr Benjamin Koh, has told the Senate inquiry into financial advice that he was targeted for revealing  allegations of unethical behaviour inside the CBA's insurance arm.

Listen to my report broadcast on The World Today

The Commonwealth Bank maintains Dr Koh was dismissed for a privacy breach unrelated to his whistle-blowing and that he sent 260 Comminsure documents to his personal Gmail account in breach of bank policy.

But Dr Koh has rejected the CBA's claims and maintains he was sacked because he was a whistleblower and has since been vilified by senior CBA corporate affairs staff.

"I've got nothing to gain from doing what I did. But by implication they have smeared me. And I've also that PR persons have gone around backgrounding politicians and journalists about my character," Dr Koh said.

"I don't know what they've said but it can't be anything good."

Under questioning from Labor senator Sam Dastyari, Dr Koh said he had been sacked because of his revelations to a Four Corners/Fairfax investigation and not because of a privacy breach.

Dr Koh said his dismissal sent an stark warning to other whistleblowers.

"If you try to do it, you'll be in for it. I'm a medical doctor, I have my code of ethics. I'm trying to do the right thing. And I get fired for some stupid, farcical reason that I sent emails to myself," Dr Koh said.

"Every single employee at CBA will be looking at this process and saying I don't believe you. I'm going to just put my head down, pretend I didn't see anything, don't ask questions, don't question anything and get on with life."

Dr Koh was originally scheduled to face the committee in person but gave his evidence via telephone in a bid to protect his identity.

Camera crews had been told if Dr Koh did appear in person his face was not to be filmed and he could only be shown from the back or shoulders down.

Dr Koh, who had worked at Comminsure since 2013, also said he had no faith in the internal committee investigating the allegations surrounding unethical behaviour at the insurer.

Jeff Morris who earlier revealed the financial planning scandal at the Commonwealth Bank told the committee he had warned Dr Koh about the risks with being a whistleblower.

"It's a classic case of deja vu all over again," Mr Morris said.

"I told Ben what it would be like and it's played out exactly as I said to him. Dr Koh went forward with this in the full knowledge that this would happen."

Wednesday, April 27, 2016

Consumer prices fall for first time since 2008; chances of May 3 rate cut rise

Consumer prices have fallen for the first time since December 2008, with deflation of 0.2 per cent in the March quarter.

The Bureau of Statistics data show inflation was just 1.3 per cent over the past year.

Money market bets on a May 3 Reserve Bank rate cut surged from 11 percent to more than 50 percent after the inflation result hit. The Australian dollar dived a full US cent to be as low as 76.49 US cents.

Listen to my report and analysis on The World Today shortly after the data hit

A$ dives full US cent as low as 76.79 US cents after CPI release    Source: Bloomberg

Multinationals face steeper penalties for avoiding tax, warns Tax Office

The Tax Office has warned it is prepared to ask the Federal Government for even steeper penalties as part of its crackdown on multinational tax avoidance.

Listen to then interview with the ATO's deputy commissioner Jeremy Hirschhorn broadcast on AM this morning

The new missive comes as the ATO (Australian Tax Office) has confirmed that some multinational companies have created complex schemes to dodge tough new laws in tax avoidance introduced at the beginning of the year.

Deputy Commissioner Jeremy Hirschhorn told the ABC's AM program the ATO reserved the option of recommending penalties beyond the current level of 120 percent of the tax avoided.

"Fines of 120 percent are pretty tough penalties. But of course if the law is not working we have no hesitation to ask the government for changes in the law," Mr Hirschhorn said.

"There is an attitude in some companies that if things are permitted by law, no matter how artificial they are, that that's okay.

"There has been a minority who did seem to take it as a bit of a challenge to come up with an even fancier picture on a white board."

Yesterday the ATO released a series of taxpayer alerts warning multinationals it was tightening the tax avoidance noose.

Mr Hirschhorn said that while the  "vast bulk" of multinationals pay the right amount of tax, the ATO is now reviewing new "profit shifting" and "thin capitalisation" arrangements designed to avoid paying tax on profits made in Australia.

He says the ATO is talking to around 170 companies about whether their tax strategies are in line with the new laws.

And he warned that law firms advising multinationals on schemes that flout the law could find themselves targeted by the tax man.

"We have rules called the promoter penalty rules and the promoter penalty rules say that if you promote a tax scheme which is not effective then you are potentially subject to very significant penalties in your own right."

Mr Hirschhorn also reminded multinational that the Tax Office is prepared to flex its substantial muscle if warranted.

"We're on to these things quickly. We're not some defenceless group just waiting for multinationals to avoid tax. We are taking very active steps," Mr Hirschhorn said.

Tuesday, April 26, 2016

Saudi Arabia prince unveils plans to end oil "addiction"

Saudi Arabia has unveiled ambitious plans to eventually end the nation's historic reliance on oil production and exports to the rest of the world.

Deputy Crown Prince Mohammed bin Salman - second in line to the Saudi throne - has described the oil reliance as "an addiction" as he announced major plans to overhaul the economy.

Part of the "Vision 2030" blueprint would see just under five percent of the state-owned oil company Saudi Aramco sold through an initial public offering which values the company at more than US$2 trillion.

The action comes as Middle East oil producers including Saudi Arabia reel from record low oil prices would could cut revenues by US$500 billion this year.

"Today, our constitution is based upon the Holy Book and on oil. This is very dangerous. We have a kind of oil addiction in the kingdom," Prince Mohammed told his first ever news conference with international journalists in Riyadh.

"We will not allow our country ever to be at the mercy of commodity price volatility or external markets.

"Our ambition is how we develop the economy more than nowadays, and how we can create an attractive and great environment in our country in order to be proud of our nation and to be part of development on economic, environmental, cultural, and intellectual levels."

The International Monetary Fund says oil producing nations in the Middle East - or OPEC - lost US$390 billion in oil revenue last year alone.

With US shale oil producers pumping more than ever before and Iran production coming back on line with US sanctions lifted, the planned Saudi reforms underscore the damage from falling revenues.

"There's no question that the Iranian deal has hurt them (Saudi Arabia) than anyone else. But this is fundamentally about the end of OPEC," Ian Bremmer from the Eurasia Group told CNBC.

"New technology is taking power away from the traditional oil producers who thought they had a grab hold on it since the 70s.

"Well sorry guys over the course of literally two years the US has gone from a high priced producer to a medium priced producer and you guys don't have a model.

"You've had 40 years to try to figure out what to do. They've wasted that time."

Among the reforms being considered to counter falling oil revenue, Prince Mohammed is looking at big structural changes in Saudi Arabia's ultra conservative economy - dealing with unemployment, creating more infrastructure projects, boosting home ownership and opening up the real estate sector to foreign ownership.

In a bid to boost the Saudi treasury coffers, the Prince is also planning to overhaul the Saudi military to prepare for what he is calling "the post oil era".

The prince wants more domestic production of arms, give that much of Saudi Arabia's US$46 billion military hardware budget is spent on deals with foreign arms manufacturers.