Key John: Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill — First Reading 
Key John: Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill — First Reading 
[Volume:607;Page:4657] 
JOHN KEY (NZ National—Helensville) 
: 
 I rise on behalf of the National Party to oppose this bill. I am absolutely delighted that David Cunliffe used the words he did at the end of his speech about pro-growth pro-business and all the rest of it. Those are the sorts of words that come out of the Labour Party—certainly not the National Party or the ACT party. They are fundamentally wrong—just plain wrong. I find the logic of Labour supporting this legislation quite perverse. When I look at this legislation I find that it smacks of one thing and one thing alone. 
David Cunliffe 
: Common sense! 
JOHN KEY 
: It is not common sense as Mr Cunliffe said. I look to United Future for that and unfortunately I look away pretty quickly when I look there as well. So no it is not about common sense. It is about looking after the fat cats—a couple of fat cats who own the movie theatres around the country. It is about a couple of cronies up in Whakatane or somewhere who somehow got into the ear of the Prime Minister. She must have been up there opening a bird bath or something. They had a chat to her and said: “Could you just slap a ban on this for a while. Don’t worry about the 4 million consumers in New Zealand. They really won’t mind. It’s OK.” Well it is very interesting. Who benefits when one puts a quota a subsidy a tariff or a ban on anything? It is the fat cats—the people who own the quotas. They are the people who benefit not the consumers of New Zealand. The consumers of New Zealand currently as we speak are probably rushing down to the local Blockbuster outlet to get their parallel-imported video or DVD because they know that “Time is up!” as Betty Boothroyd used to say so vigorously in the British Parliament. Time is up for them to have choice and reduced prices. 
Let me talk for a moment about why this legislation is so fundamentally flawed. Under this system choice will diminish. Prices will go up and product availability to the consumers of New Zealand will go down but not to all consumers. There is a group of consumers who are less likely to be affected when a ban is put in place. I put it to this House that that group comprises the wealthy young New Zealanders. They are the New Zealanders who shop on the Internet quite comfortably and happily and who are happy to bring in a parallel import. But far more important they are the consumers who are quite happy to buy a DVD. The people who will be really affected by this legislation are the consumers of New Zealand who like to rent a video at the same time as a movie comes out in their local movie theatre. They are the people who will be affected. They are the people who will not be able to get their rental. The fat cats who own the cinemas will be able to watch it. They will not be affected; nor will the wealthier people around New Zealand who are happy to pay $49.99 to import a DVD over the Internet. No it will be the poorer people who will be affected. 
We have heard some very contradictory things in the debate on this bill. The member for the Greens Mike Ward got up and said: “New Zealanders like going to the movies. It is all about the popcorn and the ice cream.” I like going to the movies and I thoroughly enjoy taking my family with me—my two young children and my wife. If it is raining on a Sunday afternoon in Auckland there is nothing nicer than to wander down to the movie theatre and watch a movie. 
Gerry Brownlee 
: It rains up there most Sundays. 
JOHN KEY 
: The member for Ilam is quite wrong. It does not rain on most Sundays in Auckland. It rains on a lot of Sundays but not on most Sundays. Parallel importation has been in place in New Zealand since 1998. It has not stopped me from going to the movies or from taking my two children to the movies. But it has allowed two markets to develop. There is the market for people who like to rent a movie on a Saturday night because their kids are aged 2 and 1 and they cannot afford a babysitter or to go out to the movies. They want to enjoy a movie that is current and not wait to see it in 9 months’ time when it has gone from being fashionable to unfashionable. They are not interested in watching a movie that has already been bagged by movie critics on radio stations and television. Who wants to see  
The Lord of the Rings 
 2 years after it has come out? People know the punchline by then. It is like  
King Kong 
—who wants to see it 2 months after it comes out? People want to see movies when they are fresh. 
I will touch on another argument that Mr Cunliffe raised in his blistering speech in the House in defence of this bill. He talked about the idea of more money going back into the local industry. I will quote from a Treasury document which we virtually had to remove with a crowbar from the Government’s large filing cabinet. Through the Official Information Act and the diligent work of the Hon Tony Ryall we have obtained that document. I feel like Chamberlain because I have in my hand a piece of paper that signifies why this is a very bad idea. I will relay for members Australia’s experience of parallel importing. It is estimated that Australians paid $1.15 billion more to listen to music than they would have paid if parallel importing had not been in place. Yet there is no evidence that the Australian industry benefited from that at all. What Mr Cunliffe is talking about is a very interesting argument called cross-subsidisation. The argument goes a little bit along these lines: if multinational copyright-holders are able to catch a higher return—let us say they can charge $5 more for the importation of the Harry Potter books—they will use those funds to cross-subsidise the local development of creative arts in New Zealand. 
Apart from holding the Treasury document—fortunately I have two hands—I also have a document from the Ministry of Economic Development which is scathing about this legislation. It states that there is absolutely no evidence at all that more money will go back into cross-subsidisation. If the Labour Party thinks the way to develop the creative industry in New Zealand is to slap on a quota or a ban or to have parallel importing and to go back to the old days when one had to know a Cabinet Minister before being able to bring in anything then I would like it to explain just one thing to me: in the 4 years since the parallel importing legislation has been in place in this country why have we seen a continued growth in our creative industry? 
Why is it that Peter Jackson and those wonderful people down at Weta will now have the opportunity to turn  
King Kong 
 into a major movie? Is it because when the Prime Minister was opening the bird bath in Whakatane a local movie theatre owner came to her and said: “Excuse me Prime Minister could you possibly slam a 9-month ban on parallel importing so that I can carry on?” Is that the reason? No. The reason that Peter Jackson the producer of the  
The Lord of the Rings 
 trilogy and Weta are able to produce  
King Kong 
 is because they are very very good at what they do. They are world-class at what they do. Make no mistake about it: more money will flow into the creative industry in New Zealand if we are very good at what we do. That will not happen if we slap some arbitrary ban on things and decide that there is one set of rules for one person and one set of rules for another. It will not happen if we have legislation that protects the fat cats at the cost of the consumers. 
Before I finish my speech I will just touch on one other issue relating to the argument on pirated products. One of the arguments put up by the industry is that parallel importing will make it more difficult to stop those who pirate goods and that it will actually help such people. As I read the report issued by the Ministry of Economic Development I found no evidence that that has any impact at all. Nor was there any evidence that rental rights were diminished as a result of parallel importing. 
The basis of my speech is simply this: I believe there are two forms of markets opening up in New Zealand. There is a market for those who wish to go the movies and who enjoy doing so because the movie theatres are tailored around their expectations—maybe the theatres are local or have bigger seats or maybe it is just a day out for those people. That is an industry that has carried on and flourished ever since National was wise enough to reform this legislation some years ago under the stewardship of John Luxton. That has done wonderfully. Equally an industry has grown up around those who wish to watch a movie on DVD the Internet or video as soon as it is available—not when the movie is 9 months old or when the fat-cat owner of the local picture theatre in Whakatane determines it is the right time to watch it. I favour the free-market choice and the development of all industries. I oppose this legislation.