Bills Digest No. 40 1998-99
Classification (Publications, Films and Computer Games) Amendment Bill
1998
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer and Copyright Details
Classification (Publications, Films and Computer Games) Amendment
Bill 1998
Date Introduced: 25 November
1998
House: House of Representatives
Portfolio: Attorney-General
Commencement: On
Royal Assent with the exception of Part 2 of Schedule 1 dealing with the
imposition of charges, which is to commence the day on which the Classification
(Publications, Films and Computer Games) Charges Act 1998 commences.
To establish administrative provisions for the collection
of charges for classification and other services imposed by the Classification
(Publications, Films and Computer Games) Charges Bill 1998.
This Bill replaces the Classification (Publications,
Films and Computer Games) Bill 1997 which passed the House of Representatives
on 4 December 1997, having been introduced on 26 November 1997. The previous
Bill was introduced into the Senate on 4 December 1997 but not debated
further. It lapsed when the election was called on 31 August 1998.
The new Bill contains one significant change from the
earlier Bill. It concerns the power of the Director of the Classification
Board to waive the whole or part of the charges for classification of
material that has limited market appeal. This change has been made following
concerns expressed by independent film exhibitors about the possible inequity
of the new charges.
The Classification (Publications, Films and Computer
Games) Act 1995 (the Principal Act) is part of a Commonwealth, State
and Territory co-operative legislative scheme for the classification of
publications, films and computer games and enforcement of classification
decisions made under it. That Act established the Classification Board
and the Classification Review Board on 1 January 1996 and provides the
procedures for the classification of material.
Cost Recovery of Classification Services
As a result of a Government decision in March 1995, the
Office of Film and Literature Classification (OFLC) has been required
to recover the cost of providing classification services. An incremental
approach over three years was adopted, with the first stage increases
in fees coming into effect on 1 January 1996.
In 1996, Pivotal Management Consultants, an independent
accountancy firm was engaged to conduct a review of the OFLC pricing structure
and to identify costs for each classification service. Pivotal produced
a Pricing Policy Review Report which contained 15 recommendations including:
- a scale of fees for film classification according to film duration
- new fees for interactive films
- differential fees for 'public exhibition' and 'sale or hire' classifications,
and
- commercial fees for pre-classification advisory services.
Consultation meetings to discuss the Report were held
with the relevant industry groups in March 1997 resulting in the recommended
fees being introduced from 1 July 1997 with fee levels being set at 75%
of the 1998/99 fee level targets.(1)
On 1 November 1997 classification fees increased again
and according to the Government are now set at 100% cost recovery for
the provision of those services. These most recent increases have received
criticism from relevant industry groups and from within the Parliament.
Senator Bob Brown in a Motion of Disallowance on 19 November 1997 argued
that the new fees represent a total increase in an 18-month period of:
- 360% for film
- 130% for video, and
- 69% for computer games.
Senator Brown and industry groups also argued that the
new fees were discriminatory and would harm the diversity of the film
industry. As the Senator has said, small speciality video producers will
pay the same as a large company producing tens of thousands of videos.(2)
The Australian Independent Distributors Association has also said that
the increases will harm small independent publishers, importers and film-makers
and the Association has called on the Government to replace the current
system with one that reflects the number of prints distributed.(3)
The Attorney-General, Hon Daryl Williams QC MP responded
to these concerns when introducing the previous Bill on 26 November 1997.
In his Second Reading Speech he announced that the Government had agreed
to set up an independent inquiry to review the charges structure and to
ensure greater equity to independent film exhibitors. The Inquiry was
to report by 30 April 1998 and was carried out by accounting firm Ernst
and Young.(4)
Although the findings of the Inquiry were not conclusive,
the Government subsequently decided that special interest material which
has limited distribution may be classified at reduced rates. The Explanatory
Memorandum to this Bill gives some examples of the types of special interest
materials which might be covered. These include records of an artistic
or cultural performance and documentaries of public, sporting and religious
events.(5)
Full Cost Recovery of the Office of Film and
Literature Classification
In May 1997, the Government announced a new budget measure
to take effect from 1 July 1998 to recover 100% of the OFLC operating
costs from users.(6) These operations include activities ancillary to
classification services such as research, policy development, ministerial
support and payments to the States and Territories for enforcement and
related purposes. The measure will result in a significant increase in
classification charges from the current level of fees. For example, as
of 1 November 1997, the current fee for an application for classification
of a film for sale or hire ranges from $510 to $1,010 (depending on the
length of the film).(7) Under the proposed new charging arrangement to
come into force when the Classification (Publications, Films and Computer
Games) Charges Act 1998 commences, this will range from $810 to $1,590.(8)
The current fee for classification of a computer game is $590. This will
become a charge of $930.(9)
Constitutional Implications
At present, fees for applications for classification
and other services under the Principal Act are prescribed in regulations
made under that Act.
The limitations imposed by section 55 of the Australian
Constitution, mean that the proposed charges to recover the full cost
of the operation of the OFLC from users cannot be included in the fee
for the provision of classifications services. Section 55 of the Constitution
provides [in part]:
'Laws imposing taxation shall deal only with the imposition
of taxation and any provision dealing with any other matter shall be of
no effect.'
In order to implement this Budget measure, separate legislation
is required to impose as a tax, charges for applications for classification
and related services - thus the need for the Classification (Publications,
Film and Computer Games) Charges Bill 1998.
It is to be noted that questions have also been raised
about the constitutionality of the Classification (Publications, Films
and Computer Games) Regulations 1997. In the Senate Disallowance Debate
on 19 November 1997, it was argued that a full year of fees set at the
1 November 1997 level will result in recouping more than the actual cost
of running the classification system. On the criteria of the High Court
in Air Caledonie International v The Commonwealth(10), if the fees
for classification are excessive in relation to the cost of processing,
then the fees would be exactions in the nature of a tax. Under section
55 of the Constitution, if the fees may be deemed taxes, they render ineffective
the other provisions of the Principal Act.
These Bills do not affect or change the co-operative
legislative arrangements for the classification of publications, films
and computer games currently existing between all Australian Governments.
Main
Provisions
The Classification (Publications, Films and Computer
Games) Amendment Bill proposes the removal of references to prescribed
fees in the Principal Act and their replacement with references to charges
prescribed under the Classification (Publications, Films and Computer
Games) Charges Bill 1998.
Items 1-10 of Schedule 1 simplify the procedures
for applying for classifications required for investigating or prosecuting
offences. Under State and Territory law a prosecution cannot be brought
in respect of unclassified material until the material seized is classified.
According to the Explanatory Memorandum, failure to comply with the current
complicated procedures for classification has caused difficulty for authorities
bringing prosecutions. In order to simplify this procedure, item 8
inserts a new section 22A into the Principal Act and requires only
that applications relating to enforcement:
- be in writing
- on a form approved by the Director
- signed by or on behalf of the applicant
- accompanied by a copy of the publication, film or computer game, and
- payment of the prescribed fee is required but need not accompany the
application.
In a Press Release made after the previous Bill had been
passed by the House of Representatives on 4 December 1997, the Attorney-General,
Hon Daryl Williams MP described the bill as 'simplify(ing) requirements
under which material that is the subject of investigation or prosecution
must be submitted by enforcement authorities for classification.' He said
that the Bill closes 'loopholes that have impeded State and Territory
authorities from successfully prosecuting those who have breached the
classification regulations for publications, films and computer games...Closing
these technical loopholes...will ensure that technical procedural requirements
do not stall or unnecessarily impede investigations and prosecutions'.(11)
Items 16, 18, 20, 22-24, 27, 29 of Schedule
1 amend the Principal Act so that the relevant applications to the
Board be accompanied by the charges as prescribed by the Classification
(Publications, Films and Computer Games) Charges Bill rather than by the
prescribed fee currently in operation. Items 14-15 insert
into the Principal Act a definition of 'prescribed charge' and 'prescribed
fee'.
The charges do not apply to the Commonwealth and its
agencies or authorities. However items 17, 19, 21, 25, 28 and 30
refer to a new section 91A which makes the Commonwealth and its
agencies and authorities notionally liable to pay the charge.
The new charges will not apply to applications by the
Commonwealth, States and Territories for use in the investigation and
prosecution of an offence. The fee applications for classification for
enforcement purposes will not exceed the cost of providing the services.
Therefore these fees will continue to be prescribed by regulations under
the Principal Act. It is to be noted that enforcement authorities in Victoria
have suggested that the current fee regime causes a dilemma for prosecuting
authorities. The Age of the 27 June 1997 reported that in 1996,
Victorian police seized 6500 pornographic videos. The head of the Gaming
and Vice Squad suggested that with classification taking several months
and costing up to $250 for one video, it is impossible to get classification
of every video it seized.(12)
Item 32 gives power to the Director of the Classification
Board to waive all or part of the charges for classification. In exercising
this power the Director must follow written principles that have been
agreed to by the Minister. The Minister in turn, is required to have consulted
with the appropriate State and Territory Ministers about the principles,
before agreeing to them (proposed new subsection 91(1A).
- Classification Board & Classification Review Board. Annual
Report, 1996-97, p. 49.
- 'Classification (Publications, Films and Computer Games) Regulations
Motion for Disallowance', Senate Debates, 19 November 1997.
- 'New fees 'a threat' to films, journals', The Canberra Times,
3 November 1997.
- Second Reading Speech, Classification (Publications, Films and Computer
Games) Amendment Bill 1997, House of Representatives Debates,
26 November 1997, p. 11269.
- Classification (Publications, Films and Computer Games) Charges Bill
1998 Explanatory memorandum, p. 14.
- 1997/98 Budget summary. Daryl Williams QC MP. Media Release
(Attorney-General and Minister for Justice), Federal Budget 1997, 13
May 1997.
- Classification (Publications, Films and Computer Games) Regulations
SR 1997 No. 282.
- Classification (Publications, Films and Computer Games) Charges Bill
1998, schedule 2, clause 2.
- ibid., schedule 3, clause 1.
- (1988) 165 CLR: 462.
- 'Crackdown on classification offences', Daryl Williams QC MP, Press
Release (Attorney-General), 373, 4 December 1997.
- 'Vice squad in dilemma over seized porn', The Age, 27 June
1997, p. 4.
Mary Anne Neilsen and Rosemary Bell
30 November 1998
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
© Commonwealth of Australia 1998
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