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Classification (Publications, Films and Computer Games)
Amendment Bill 1998
Date Introduced: 25 November 1998
House: House of Representatives
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
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
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
- new fees for interactive films
- differential fees for 'public exhibition' and 'sale or hire'
- 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
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
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)
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
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 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
- 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
- Classification Board & Classification Review Board.
Annual Report, 1996-97, p. 49.
- 'Classification (Publications, Films and Computer Games)
Regulations Motion for Disallowance', Senate Debates, 19
- '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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