Bills Digest No. 40  1998-99 Classification (Publications, Films and Computer Games) Amendment Bill 1998


Numerical Index | Alphabetical Index

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

Passage History

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.

Purpose

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.

Background

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).

Endnotes

  1. Classification Board & Classification Review Board. Annual Report, 1996-97, p. 49.

  2. 'Classification (Publications, Films and Computer Games) Regulations Motion for Disallowance', Senate Debates, 19 November 1997.

  3. 'New fees 'a threat' to films, journals', The Canberra Times, 3 November 1997.

  4. Second Reading Speech, Classification (Publications, Films and Computer Games) Amendment Bill 1997, House of Representatives Debates, 26 November 1997, p. 11269.

  5. Classification (Publications, Films and Computer Games) Charges Bill 1998 Explanatory memorandum, p. 14.

  6. 1997/98 Budget summary. Daryl Williams QC MP. Media Release (Attorney-General and Minister for Justice), Federal Budget 1997, 13 May 1997.

  7. Classification (Publications, Films and Computer Games) Regulations SR 1997 No. 282.

  8. Classification (Publications, Films and Computer Games) Charges Bill 1998, schedule 2, clause 2.

  9. ibid., schedule 3, clause 1.

  10. (1988) 165 CLR: 462.

  11. 'Crackdown on classification offences', Daryl Williams QC MP, Press Release (Attorney-General), 373, 4 December 1997.

  12. 'Vice squad in dilemma over seized porn', The Age, 27 June 1997, p. 4.

Contact Officer and Copyright Details

Mary Anne Neilsen and Rosemary Bell
30 November 1998
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

IRS staff are available to discuss the paper's contents with Senators and Members
and their staff but not with members of the public.

ISSN 1328-8091
© Commonwealth of Australia 1998

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1998.

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