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CONTENTS
Classification (Publications, Films and Computer Games)
Amendment Bill 1997
Date Introduced: 26 November 1997
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 commences on 1 July 1998
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 1997.
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 argue that the new fees
are discriminatory and will harm the diversity of the film
industry. As the Senator 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 hascalled
on the Government to replace the current system with one that
reflects the number of prints distributed.(3)
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.(4) 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).(5) Under the proposed new charging arrangement to come into
force on 1 July 1998, this will range from $810 to $1,590. The
current fee for classification of a computer game is $590. This
will become a charge of $930.
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 these proposed charges cannot be included
in the fee for the provision of classifications services. Section
55 of the Constitution provides:
'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.
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 recent
Disallowance Debate, it was argued that a full year of fees set at
the 1 November level will result in recouping more than the actual
cost of running theclassification system. On the criteria of the
High Court in Air Caledonie International v The
Commonwealth(6), 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.
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.
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 prosecuting authorities. 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.
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 prosecution. 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.(7)
The Attorney-General in his Second Reading Speech recognised the
concerns of independent film exhibitors in relation to the possible
inequity of these new charges. As he said, concern has been
expressed about the effect of the fee increases on the
classification of material that has a limited market appeal in
Australia.(8) In response to these concerns, the Government has
agreed to set up an independent inquiry to review the charges
structure and to ensure greater equity to independent film
exhibitors. The Inquiry is due to report on 30 April 1998, ie three
months before the proposed changes come into effect.
- Classification Board & Classification Review Board.
Annual report, 1996 97: 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.
- 1997/98 Budget summary. Daryl Williams 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.
- (1988) 165 CLR: 462.
- 'Vice squad in dilemma over seized porn', The Age, 27
June 1997: 4.
- Similar concerns were expressed by members of the film industry
in a Four Corners program of 6 October 1997 entitled
'Moving numbers business' - (available from the Parliamentary
Library).
Mary Anne Neilsen
4 December 1997
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
© Commonwealth of Australia 1997
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Published by the Department of the Parliamentary Library,
1997
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