• John Luxton

The removal of parallel importing restrictions takes away the last substantial form of import licensing still operating in New Zealand and will ensure that families and businesses are able to buy imported goods and machinery at world best prices, Minister of Commerce John Luxton said today.

As part of the Budget, the Coalition Government introduced legislation to amend the Copyright Act 1994 to remove the restriction on "parallel importing" of copyright goods. Parallel importing occurs when lawfully manufactured copyright goods are imported into a country directly without the permission of any local franchise holder of the copyright in that country.

"The result will be lower prices for New Zealand consumers and businesses, and an increased availability of some goods. The law change is consistent with other steps that the Government is taking to move towards a more open and competitive economy, in which the benefits are passed on to consumers and local businesses.

It will also improve international competitiveness and create more jobs," Mr Luxton said. Mr Luxton said the previous prohibition had been facilitating exclusive distribution arrangements, which saw some distributors charging New Zealand consumers far higher prices for goods than were being charged in other countries.

"New Zealand will be following some of our trading partners, such as Japan and Singapore, which already take a similar approach, in that they do not have a general prohibition on parallel importing of copyright goods, but still protect the core rights of copyright holders. Likewise the Australian Government has also moved to allow parallel importing." Mr Luxton confirmed that the law change would not breach any of New Zealand's international treaty obligations.

"Removing the prohibition will allow New Zealand importers to purchase the goods in countries in which they were sold more cheaply, and import them directly into New Zealand, rather than having to purchase through an exclusive distributor who might be already based overseas." An independent report commissioned by the Commerce Ministry from the New Zealand Institute of Economic Research found that the net impact of removing the parallel importing restriction was likely to be positive, and that the net benefit for New Zealanders from the parallel importing of cars that has occurred since import licensing was removed in 1989 could be estimated at nearly $600 million.

With the closure of the New Zealand car assembly industry there has been an increasing concern that the current restrictions on parallel importing might be used to reinflate car prices in New Zealand. This will no longer be a concern. The ability of some monopoly franchise holders to price manufacturing inputs and machinery at internationally uncompetitive prices can also prevent New Zealand manufacturers and exporters from producing at prices which are internationally competitive.

In today's globalised environment NZ exporters need to be able to source their plant and raw materials at world best prices. These changes will assist our export sector to continue to grow strongly and provide new jobs for New Zealanders.

Mr Luxton stressed that the changes did not mean the Government was relaxing its stance on intellectual property rights. New Zealand would continue to protect the core rights of copyright holders, and copies which had been made without the permission of the copyright holder (known as pirated goods) would continue to be prohibited.

The package announced by the Government includes a large increase in the penalties associated with pirated goods, with maximum penalties rising from $50,000 to $150,000. Importers were cautioned that despite the lifting of this restriction, other import restrictions under other Acts continued to apply in some circumstances.

Mr Luxton stressed that this amendment had been introduced because the Government did not think that copyright laws should continue to enable overseas copyright holders to control distribution of goods that they had already sold.