Copyright (Parallel Importing of Films) Amendment Bill — In CommitteeText is incorporated into the Bound VolumeCopyright (Parallel Importing of Films) Amendment Bill — In Committee[Sitting date: 24 September 2013. Volume:693;Page:13642. Text is incorporated into the Bound Volume.]Copyright (Parallel Importing of Films) Amendment BillIn CommitteeHon CRAIG FOSS (Minister of Commerce): I seek leave for there to be a single debate on all clauses of the Copyright (Parallel Importing of Films) Amendment Bill with each question to be put separately at the conclusion of the debate.The CHAIRPERSON (Lindsay Tisch): Leave is sought for that purpose. This is that clauses 1 to 4 be taken as one question. Leave is sought for that purpose. Is there any objection? There is no objection.Clauses 1 to 4JACINDA ARDERN (Labour): I will take the opportunity to be the first member to rise to speak on the Committee stage of the Copyright (Parallel Importing of Films) Amendment Bill. I thank the Minister of Commerce for talking openly with various parties through this process over how to proceed with this issue. This is one of those issues that I think Parliamentary colleagues can at least discuss and debate openly and frankly. I know that happened during the select committee process and indeed beforehand.I do want to put on the record that the general issue of parallel importing did meet with two differing perspectives within our caucus. It was very much a line call for the Labour Party as to which way we would go. Indeed there are arguments on both sides as to whether the time has come immediately at the point of expiration—which is currently for this existing law in mid-October—to just simply let it lapse and expire or whether we allow a small and final extension to the existing law. As I have said before in this debate where we have come to as a party is to opt for a time-limited compromise. That is to say we satisfy to a certain degree the view that it must go byrestipulating and restating clearly today that the extension being applied here and now will lapse in a few years’ time and that it will lapse for good. I think that is somethingthat even those members who are not voting for the bill today are indicating—that they want to see it go. I have even heard from members from the opposite side of the Chamber who agree that this is the final chance.The reason I think we need to state that very very clearly is that the Copyright (Parallel Importing of Films) Amendment Bill is an amendment to the Copyright Act 1994 which bans the commercial parallel importation of films for 9 months from the date the film was first released. I believe there have been three extensions Minister?Hon Craig Foss: Two.JACINDA ARDERN: There have been two extensions. So this is the third extension to that legislation. So there had been multiple chances before. The reason we want to be very clear that this is the last chance is that I know that some parties have based their opposition on the fact that they are worried that there will be another extension. We will not support another extension under any circumstances. We have made that extremely clear. For us this is the line in the sand for the industry that the time is up.So why did we fall on the other side of allowing this one last final extension? Well we have put some caveats around it. Of course those are set out in what is a very short bill. Those are set out in the last part of the bill. Subclause (2) of clause 4 states essentially that this bill will expire on 31 October 2016. There was an opportunity for a longer extension than that. We have said no; we think that we can make it shorter and that is the time that we have gone for. The second indication that this is the last chance is the fact that under clause 4 “Section 35 amended (Infringement by importation)” those infringements apply where a person imports a copy of a film into New Zealand within 5 months of the date that the film is first made available to the public. So instead of as it was previously a 9-month window it has now changed to a 5-month window. Again that indicates that this is an incremental withdrawal of the ban on parallel importing of films that currently exists in New Zealand.I want to talk briefly though about the rationale behind that ban existing in the first place. We have heard some of the arguments already. There are currently 120 cinemas in New Zealand. In people’s minds they might immediately resort to thinking about the cinemas in the big cities—multi-screen cinemas the ones that look like they could probably sustain themselves quite readily if you removed any importation ban that exists. There is of course another set of cinemas that exists in New Zealand—smaller provincial cinemas which for instance may not have converted to digital exhibition and we know at this stage that only about 57 percent have. Those cinemas are quite reliant for instance on the revenue that they take in around family films at school holiday times in particular. And of course there are those that might specialise in providing smaller fringe films—arthouse films and so on. Those are the ones that certainly are going to need to adapt to a removal of an importation window. It is to those cinemas that we send the message that there is now this small amount of time left before that opportunity will no longer exist for them.Some might argue that there are other industries that have had to adapt to the changing world. The music industry is a prime example of an industry that has had to adapt quickly to the fact that citizens and consumers are now accessing products in a much faster way. Digital and online accessibility has changed the way that we consume those products and they have had to adapt rapidly to that. It is about giving consumers choice and accessibility. The film industry has not done that as rapidly. It is of course with some disappointment that I say that that is the case but as I mentioned this is that one last chance for it to do so. I would encourage the industry not to use the October 2016 date as an end point target but rather as an indication that it should move as rapidly and as quickly as possible for the sake of consumers.It is interesting that the regulatory impact statement does make some points around the factors that impact on the timing of release of films in New Zealand. I just want to share this to give the Chamber a little indication as to why this window is often used in the way it is and why it is important to those who work in the cinema exhibition space. The first thing to say is that when something does go to a cinema and if it has been released that does not stop a consumer from accessing and purchasing that DVD online from overseas. That is not prohibited by this bill. So this argument—that it is through only illegal means that you could access it online if has been released—is not a fair comment to make. You can do that online. An argument could be made that that disadvantages your domestic providers. That is a fair argument to make but it does not entirely stop a consumer from being able to access it.What are the factors that influence the timing of a release? Seasonal factors do. Family films that are based around school holidays—we have already talked a little bit about how that then impacts on some cinemas. Other factors are competition with other films; screen availability whereby some cinemas simply will not be able to display a film immediately on release because of that screen availability; availability of advertising; and a profitability assessment. For some films distributors will decide on whether they are going to bring it to New Zealand based on profitability. So it is not an automatic assumption that we will get everything. So these are all the things that impact on whether or not something is even released in that way. There has been some concern over whether or not the parallel import ban being lifted would stop New Zealand from receiving as many films. In particular I think that is an argument that can be made around some of those foreign andarthouse films as well.On balance though I think that that is something that we are willing to sacrifice on behalf of consumers by the time that this window lapses. So you can see that this was a finely balanced decision for us. As I have said it is absolutely fair to say that there are caucus colleagues who probably would have aligned themselves more with the other side of the argument. Again that is why I call this a time-limited compromise. It is a time-limited compromise because at the end of the day all members of this Chamber probably agree that the industry does need to move it does need to change it does need to modify itself and it needs to do all of those things on behalf of the consumers it serves. In the meantime we ask the industry to move as quickly as it can to find ways to innovate—and I do not think this window removes the incentive to innovate; in fact I think it gives it the flag it needs to do it quickly—and to try to salvage as many jobs as possible. We do know from the PricewaterhouseCoopers report that was commissioned on this that we would have been looking at potentially immediate job losses of over the 100 mark for some of those smaller provincial providers. That would have been the immediate consequence.So now we are raising the flag for those providers and we are asking them to try to find a way to provide for consumers but also to try to save those jobs at the same time. Therefore that is why we have come down on this side of the argument.GARETH HUGHES (Green): Kia ora.Ngā mihi nui ki a koutou. Kia ora. I rise to speak on the Copyright (Parallel Importing of Films) Amendment Bill. It gave me great pleasure to support Minister Foss’ Patents Bill but it also gives me great pleasure to oppose this bill because I think it is bad legislation. I think it is anti-innovation. I think it is anti-competition. I think it is an old-fashioned bill that looks at a single platform and is quite literally giving a single platform—cinemas—a statutory monopoly which is disadvantaging other platforms disadvantaging competition and keeping us in the past. That is why the Green Party is going to be opposing it.I think it is quite good that we are taking the debate on this two-page bill as one question because it could have been drawn out for quite a long time if this Committeeso desired. Being one question we can look at all the clauses in this two-page bill. All this bill does is reinstate the parallel importing ban of films—for 5 months down from 9 months—out to 2016.We have noted in previous stages of this bill our disappointment with the process. We received a letter from Minister Foss which we were discussing in our caucus and that afternoon the bill was put on the Table—introduced under urgency. It was not like we needed urgency for this bill. We have had 10 years’ warning that this date was coming—when the predecessor of this bill that enforced the existing parallel importation ban would expire. We had 10 years’ warning. There was no need for haste. The process was very poor but I would like to acknowledge the officials. I would like to acknowledge the Commerce Committee members—in particular Clare Curran and Jonathan Young the chair—and all the submitters. There was a small number of submitters but they made high-quality submissions.I take the position that there was no good reason expressed in the committee for why this sector this platform for distribution needed a statutory monopoly to protect itself for only 3 years. I heard no justification. In fact what we heard was that the sector had 10 years to prepare—10 years to prepare. If it cannot do it in 10 years why is it going to do it in 3 years? I am a supporter of cinemas I am a user of cinemas but I want to go to a cinema because it is a great experience and it offers a great service and maybe films on a big screen in 3-D. I do not want to have to go to a cinema because it is the only way I can use content.Disabled communities need different ways of using content. Giving them only the cinema experience limits their options. That is why it is going to drive piracy or as I call it copyright infringement. That is what we heard on the select committee. What this bill does is encourage online copyright infringement just as the music industry’s not providing legal content at an affordable price for so many years drove infringement by a whole generation of which I include me because I am 31 who learnt—not that I did it of course—to infringe copyright material because there was no legal way to get it online. What we are saying here is that under this bill this is the only way we are going to get content and the fact is that for many New Zealanders the only other way is to do it unlawfully.I believe this is akin to the butter-margarine debates we had in New Zealand in the 1970s and 1980s where in order to protect New Zealand’s dairy industry and butter industry we gave it a statutory monopoly and actively discriminated against margarine—it was very difficult to get margarine—to protect our butter industry. What we are saying here is that in order to protect one content platform we are going to stop innovation. I hear the word “innovation” being bandied about in this Chamber all the time. Here was an opportunity to provide new digital content platforms to provide new businesses and to provide content. By limiting Kiwis’ ability to access content or in this case movies through having only platform cinemas we are stopping innovation from happening. It is good that the ban is going to happen for only 3 years and I hear the Labour Party’s example—in 3 years there will be a line in the sand. I love cinemas. I want to support them but I want to support good services and good quality not because they have a statutory monopoly.What we know is that this bill is a copyright change going through our Parliament. I find it deeply ironic that the much-anticipated copyright review which many Kiwis particularly businesses have been seeking again to promote innovation has been delayed ostensibly because of the Trans-Pacific Partnership agreement. I find it deeply ironic that we can debate and pass this bill around a parallel importing ban on copyrighted films but we cannot talk about copyright in a modern age. We cannot talk about some of our antiquated and frankly ridiculous provisions in our Copyright Actwhich was written in a pre-internet age. Likewise we cannot do what the Aussies have done and the Americans have done and look at some “fair use” exemptions. We need to have a genuine debate about copyright.Going down this path is the wrong way our Parliament should be looking. It is an old-fashioned approach that is using laws to tell Kiwis what they can use. When you tell people what they can use and what they can consume they are going to go down other paths. It is disappointing. It is sending Kiwis the wrong message. Let us promote innovation. Let us support new Kiwi businesses and new jobs. Let us support those great cinemas competing because they are providing a great environment. There are many of them in New Zealand and many Kiwis use them. That is why the Green Party is opposing this bill. We will be happy to work with any party or any member in this House to have sensible copyright reform. Kia ora.TRACEY MARTIN (NZ First): I rise to take a short call on the Copyright (Parallel Importation of Films) Amendment Bill. Firstly I will just comment that I think it is fascinating that the Green Party member Gareth Hughes appears to be exceptionally happy to have competition in an industry when it is something that will give him immediate access to something yet often I hear Green members talking anti-market and anti-competition the rest of the time. As long as it gives them instant gratification Green Party members seem to be perfectly all right about arguing that there should be competition inside this industry.I also think that when Mr Hughes talks about the fact that the industry has had 10 years to make this adjustment he is quite right and another 3 years means that there is an extension to 13 years in order to make that adjustment. It is not the case that there has been no change over the last decade; there has been a huge amount of alteration and amendment made by this industry to try to get up to speed and make the changes required because of the digitalisation of film. But I think that the Green Party member has a lack of understanding a lack of appreciation about the amount of money required by mainly rural cinema owners in order to step up to this level. It is $100000 approximately in projection equipment and screen equipment. When you are in a rural area that provides a rural service that is a lot of money; that is a lot of profit you have to make in order to reinvest in your business.That is why this Parliament should actually extend this period of time because New Zealand jobs in this industry will be lost. Already we are in a recession. Why would we make it harder for New Zealanders to keep their jobs? Listening to Miss Ardern argue against her party’s minority view position was fascinating. I found it fascinating. The Labour Party’s minority view in the Commerce Committee’s report stated: “The Labour Party is concerned that if the public cannot legally obtain material in a timely manner through DVDs subscription TV or online streaming then they become sceptical of copyright law and use illicit channels.” This concern was repeated by the Green Party in its minority view report that it “ … encourages illegal file sharing in the absence of legal alternatives.”Apart from the fact that New Zealand First believes that this is an incredibly long bow to draw we refuse to believe that New Zealanders will break the law if they cannot go to The Warehouse or JB Hi-Fi or some other retail outlet on the same day that a motion picture has been internationally released and purchase a DVD. We refuse to believe that the New Zealand public are so shallow in the way they will see a delayed release protection that helps other New Zealanders keep their jobs. We do not believe that New Zealanders are that shallow as to turn to crime—that is what it is; it is a crime and we all know it is a crime—because they cannot see a film within a 24-hour release period. We do not believe it.We also want to point out to both of these parties that they appear to have neglected to mention that the DVD retailers have protection under other legislation.Sitting suspended from 6 p.m. to 7.30 p.m.TRACEY MARTIN: Just to finish the point I was making both the Labour Party and the Green Party seem to have avoided recognition in their minority views and in their speeches today that the DVD retailer is protected by other legislation. So there is already staggered protection for other areas of this industry. For example the DVD retailer is protected for a period of 9 to 12 months from the same film being shown on pay television and for 12 to 24 months from that film being shown on free-to-air television. So when we talk about how there is a need for competition in the market let us make sure it is a level playing field when we do so.New Zealand First will be supporting this bill because we believe that the protection is required. Another 3 years’ protection is required for the rural cinemas particularly to be able to finish making the investment that they need so that they are not adversely affected by open-slather competition. I think it is worthwhile just pointing out that the PricewaterhouseCoopers report of 2012 on the New Zealand film and television industry indicated that this industry has generated more than $3.23 billion in revenue for New Zealand.CLARE CURRAN (Labour—Dunedin South): Really support for this Copyright (Parallel Importing of Films) Amendment Bill is a line call for Labour. It has been very interesting listening to the speeches from New Zealand First and the Greens on this because we have all got something in common. It is not all the same thing but we do have some of the issues in common. I think when making this line call in Labour’s minority report on this bill we called it qualified support and in the second reading of this bill I called it grudging support.Kris Faafoi: Grudging?CLARE CURRAN: Grudging. That is because of the time period that it has taken to get to this point where the film industry is still not at the point where it has converted to the digital technology and where it has come before the Commerce Committee yet again asking for another extension.I certainly think that in the select committee we had one of the best discussions on copyright that I have experienced in my almost 5 years in Parliament. I was impressed by the evolution of understanding by my National Party colleagues. I think they finally actually get some of the issues involved. I do want to give credit to the chair Jonathan Young and to his colleague Sam Lotu-Iiga for the interesting discussion that we had on the business issues and the competition issues in the select committee.I acknowledge the point that New Zealand First is making around the need for the time period to convert to the technology. I have to say that I differ on the issue of the use of downloading techniques by members of the public in order to get access to material that they cannot get otherwise. That is I guess where the Greens and Labour converge to some extent on the absolute importance of this Parliament being aware of why those issues are so important and why—with New Zealand being a small country at the top of the world or the end of the world depending on which way you are looking—it is so critical that our economy and the habits of consumers so much rely on the internet and why the internet has to be considered and be up front in the consideration of any legislation in this House. I do not think that this legislation has quite got there but it is going some way there.We had 10 submissions on this bill. They were evenly balanced in terms of for and against. There was a submission by the New Zealand Motion Pictures Exhibitors Association. I do want to talk about that because one of the points that the associationmade is the critical reason as to why Labour supports this bill. We support it because essentially it is about protecting the viability of cinemas outside the five main metropolitan cities from the effects of unrestricted parallel importing. My colleague Jacinda Ardern and the New Zealand First member Tracey Martin made this point as well about the absolute importance of our regional cinemas. I want to actually take us to what that importance is why it is important and where some of these cinemas are because that is why we think this bill is important. We think that the other reasons for supporting this bill that were put up and have been supported by the Government on the other side are not as important. It is time that the big cinema chains got their act together and worked out their business models to deal with the way that people and their consumer habits have changed.Regional New Zealand is important and Labour actually gets that. The services that are provided in regional New Zealand—cinema being one of them—are actually really critical for communities. It is really important that regional New Zealand does have access to the same kinds of services that its urban cousins do. This is one of the critical ones. I think my colleague Jacinda Ardern mentioned that there are 120 film venues around New Zealand. Well 80 of those film venues—in the sense of being chains and activities—are in regional New Zealand and are described as independents andarthouse cinemas. They are defined as being where they get to be seen in small independently owned cinemas art galleries film societies schools and university classrooms. They tend to be locally owned and operated by New Zealanders or community trusts and often can be dependent on the larger players for access to film titles and distribution.I will give a little bit of history here because it is important. In the early decades of film-going in New Zealand the independent cinemas dominated until the ascendancy of the duopoly of what were called then theKerridge Odeon and Amalgamated Theatres chains. Does anyone remember them?Hon Members: Yes.CLARE CURRAN: Yes. They largely controlled film distribution and exhibition in New Zealand. That has changed now and we have the large chains which are the Event Cinemas Hoyts Cinemas Reading Cinemas etc. There are others but a good number of these cinemas are small. They are a really integral part of New Zealand. I want to actually tell you what a few of them are. I did go through the list. There is an interesting list. They include the Capitol Cinema in Te Puke the Castle Duo Cinema in Kaikohe the Cathay Cinemas in Kerikeri and CinemaParadiso in Methven South Canterbury and CinemaParadiso inWānaka. They include the Circus Cinema in Martinborough the De Luxe Theatre inŌpōtiki the Fiordland Cinema the Focal Point Cinema in Levin and the Lido Cinema in Hamilton. They include the Light House Cinema and there are several Light House Cinemas—including Light House Cuba and Light HousePētone. They include theMetroCinema in the town hall in Dunedin and Rialto Cinemas also in Dunedin the Penthouse Cinema in Brooklyn the Starlight Cinema inTaupō and The Monkey House Theatre in Whitianga. There are many and I could go on about them. These are cinemas that provide an integral service in their communities. They are in the process of converting to digital technology but they have struggled. That is the reason why Labour supports this bill—because of that struggle and the time that it has taken which is longer than we would like but those communities need the time to translate.I would like to say that this bill does not address a wider issue. I would like the Minister of Commerce to hear this because it is actually important. This bill is just the continuation of an extension. What it does not do is provide a mechanism for some of these cinemas that may not be able to make that transition in this time period. We have said very firmly that if we become the Government and certainly while we are on thisside of the House we will not support a further extension. But there is a wider issue and that issue is that those cinemas are important. It is a wider community issue. It goes beyond the scope of this bill. I think that for the Government—this issue was raised in the select committee—there is an issue that should be addressed about community support for integral services such as community cinemas that may not under their current circumstances be able to make that financial transition to the digital technology. We certainly do not support this bill being extended further but for those cinemas that issue needs to be addressed by the Government.GRANT ROBERTSON (Labour—Wellington Central): I am sure that my colleagues will make excellent contributions in a few minutes’ time when they get that opportunity. I want to pick up where my colleague Clare Curran has just left off in terms of talking about the role of not just regional and provincial cinemas but also the independent ones that are in the cities. The Chair remarked briefly earlier that he could in fact remember the days of silent films in the cinema and no doubt standing for the national anthem and generally behaving yourself. I have to confess to the Committee that I was once removed from the Century Theatre in Dunedin for the rolling ofjaffas down the aisle so—Kris Faafoi: What a waste.GRANT ROBERTSON: That is right. If Kris Faafoi had been there there would not have been anyjaffas available to roll down the aisle. Those sorts of cinemas have a very important place in our history and indeed in the present day in many places.I want to make special mention of a cinema that Clare Curran mentioned which is the Penthouse Cinema in Brooklyn here in Wellington. In fact the cinema’s owners made contact with me as the Copyright (Parallel Importing of Films) Amendment Bill was making progress through the House and they made the point very strongly that as an independent cinema it operates within the industry in quite a different way from the large chains that we know of—Reading Cinema and so on. It is not operating on a business model that is in tune with being able to automatically get a film on release put it out and reap the benefits of that as a business in the same way as those large cinema chains do. It usually continues to rely on a local community that will come along to a film and it will not necessarily be immediately upon its release. So this is not just a problem for provincial New Zealand; it is about the different business models that operate within the cinema industry in New Zealand.I think that as a Parliament we had hoped that by now we would have moved to digital technology operating in such a way that all cinemas would be in a position to be able to deal with the removal of what was a 9-month grace period and is now a 5-month grace period. That has not happened and it has not happened for a host of different reasons. Some of those are to do with the way in which the cinema industry generally is actually struggling because people despite anything to do with parallel importing are no longer going to the movies in the way that they did. But I back what Clare Curran has said. This is actually about part of New Zealand’s culture and about ensuring that those independent cinemas can continue to have their place. So I do support the bill in its current form but I do recognise that it is not the long-term solution. There is absolutely no doubt that as a Parliament we will have to accept at some point that this legislation will expire and that the time will come in which there will not be this kind of grace period. But the fact is that the cinema industry does need this and the independent cinemas do need the extension that we have now got.The second point that I want to make is actually around the broader issue of copyright as it is discussed in this bill. It is quite clear to me that the issues of copyright have got away from this Government and that the review that was promised should have happened. The situation I do not want to see New Zealand get into is one where ourcopyright law ends up being dictated by somebody else. That is the danger that we run if we do not look at our own copyright law in the next year at the latest because the Trans-Pacific Partnership agreement currently does contain language around copyright. There is no doubt that even if it does not emerge out of the Trans-Pacific Partnership or the Trans-Pacific Partnership takes longer to complete than is hoped by the proponents of it it will include some references to copyright or later agreements that New Zealand signs internationally will start to impact on our copyright law. If we take seriously our role as a Parliament and representing the Sovereign in this country then we should be in control of an area like copyright. We should bring New Zealanders along with us in terms of what they want to see a regime contain.The kind of legislation we have here is sort of incremental—“We need to change a bit here and a bit there and extend this exclusion out.” That is actually not the way to run copyright law in New Zealand so I would encourage the Government to get on with the job in that regard. I know that there is a wide variety of views in this Parliament and across New Zealand around what the future is for copyright but let us make a New Zealand solution to that not take one that is imposed on us.Jonathan Young: Well it’s international.GRANT ROBERTSON: Jonathan Young says it is international. He is right; it is in an international context. But do we want the decisions about that being taken by negotiators in a room somewhere around the world or do we want those decisions to be driven by us and what is in the interests of New Zealanders? I would suggest that the latter is what we should be doing and that is what the Government should take heed of.I am not going to take up the full part of the rest of this call. I just want to note that as the cinema industry does evolve over the next few years we should make sure that the Government and others are alongside it so that we do not end up back here in 2016. I do not think there is an appetite in this Committee to see this extended any longer but I do support the bill so that those independent cinemas can continue to provide the service they provide. I hope this Parliament recognises that we hope that cinemas in New Zealand in the future will not just be those provided by the large international chains but will still represent the communities that they serve.Dr DAVID CLARK (Labour—Dunedin North): I also rise to speak in support of the Copyright (Parallel Importing of Films) Amendment Bill picking up from where my colleague Grant Robertson left off. I cannot claim to have been kicked out of a cinema for rollingjaffas down the aisle in quite the same way that he can and so perhaps I lose some streetcred for that but I did spend the past Sunday morning in one of the cinemas that my colleague Clare Curran mentioned earlier on in the debate the Rialto.Grant Robertson: Slacker!Dr DAVID CLARK: See it is confession time now. My colleague draws attention to it. Rialto Cinemas in Dunedin was the venue. I was there for a kindergarten fund-raiser along with a young relative of mine and many many other young relatives of other folk connected to this kindergarten. I think it is an interesting example because this is precisely the kind of event that is potentially affected by this legislation.The issue we are discussing here is whether the cinemas—thearthouse cinemas the small rural cinemas and also the cinemas in the regions—are able and ready to adapt to a more free-market environment. We were told in the submissions to the Commerce Committee that some cinemas had not yet made the expensive conversion to digital that they needed more time and that this protection mechanism would enable more of these cinemas to be able to continue to contribute to their communities in the way that they do through providing a venue for entertainment and also providing a venue where things like that very fund-raiser happen.The movie I saw incidentally was calledPlanes a variant on theCars theme. I will not be rushing back.Grant Robertson: Tolstoy?Dr DAVID CLARK: Tolstoy no—no it was not. I will not be rushing back but I did leave with a warm sense that I had contributed to that kindergarten fund-raiser and that I had been a part of a community event—something that it is harder to argue is the case when one sits at home watching a DVD of the same movie currently 9 months later but according to this legislation in future 5 months later. It is certainly these popular movies that we are told are most likely to be affected by this change in the legislation.If we look at the legislation it is a very simple bill. Seldom do we have such simple bills in the House that are not members’ bills. In fact some might wonder why we are spending quite so much parliamentary time debating this bill which we primarily all agree on when it might have been rolled into an omnibus bill or similar. In any case the entire bill is contained on pages 1 and 2 of the bill because there are only two pages as my colleague points out. The guts of it is in clause 4 which flows over from page 1 to page 2 and amends the current legislation by replacing section 35(3)(a) and (b) of the Copyright Act with “(a) imports a copy of the film into New Zealand within 5 months of the date that the film is first made available to the public; and (b) knows or has reason to believe that the film is imported into New Zealand within 5 months of that date;”. It is looking at the people who might be affected by it. That changes from the previous 9-month rule. Then finally it talks about the date upon which the legislation expires and changes that from 31 October 2013 to 31 October 2016. That is all this bill contains. That is all this bill contains apart from an attractive title and some brief explanations for those at home who might be looking at this piece of paper.This is one of the simpler bills we have to deal with. But the principle is sound and the debates were robust in the select committee as we have heard. The National Party has come out in favour of market protections and the Green Party has come out in favour of the constructive destruction of the market. It is fair to say that we had a fair bit of debate before we ended in those positions. Labour too agreed that it would support this measure but only on the basis that this is the very last time that this measure will not be applied further and that this is the once and for all extension—that cinemas must adapt and must adopt the new technologies or move on.There are of course other ways to fix this problem which have not been touched on in this debate. One of them would be to make sure that ordinary citizens had enough money in their pockets to afford the price of cinema tickets. It is interesting that we have not discussed that along the way. It is true particularly in the regions where many of these theatres are that people are feeling squeezed in the small towns in this country. The kind of two-speed economy that has developed in this country has an effect where pressure is put on cinemas that might otherwise not exist. We could suggest to the Government that perhaps by doing simple things like raising the minimum wage to $15 an hour something that would actually get people over the line to be able to afford food for their families albeit not particularly glamorous at that rate would be a sensible way of tackling this problem or making sure that median wages are rising rather than falling as they have been under this Government or making sure that housing is affordable so that people are not paying extraordinary mortgages or making sure that power is affordable so that people are not faced with power bills at the end of the month that they cannot pay.Of course Labour has policies to address these issues. I mention in passing the NZ Power proposal that Labour has brought to the table. When in Government we will stop the increases in price rises—the out-of-control increases in price rises—in the electricitysector by making sure that we buy the power at a reasonable rate at the cost of production plus a fair return and then make sure it is distributed through a fair market system at the retail level. That solution would make sure that people had more money in their pockets to afford to go to the cinema—The CHAIRPERSON (Eric Roy): Order! Come back to the bill.Dr DAVID CLARK: —which is precisely the point I was making. Otherwise we might find ourselves extending that clause 4 again in this Parliament because people would not have the money to go to the cinema and we would fear a complete collapse of our cinema system. I am simply suggesting that there are other ways of addressing this issue. Through adequate wages through addressing the power issues and through addressing unaffordable housing we could perhaps come to a more sensible solution to this problem. In any case we will be supporting this bill because we think that in the meantime this transition period for cinemas is a reasonable thing to request. It is fair. They are providing a service to those small communities. While we are running this two-speed economy under the National Government we will let this go but Labour will fix the causes of the problem and then New Zealand will be better as a whole. Thank you.KRIS FAAFOI (Labour—Mana): It is my pleasure to take the final call I think on the Copyright (Parallel Importing of Films) Amendment Bill to consolidate the thoughts of my colleagues on this bill. I will start with the bill because that is what you probably want me to do. As my colleague David Clark mentioned it is a very thin bill and the main part of it is in clause 4 which amends section 35 of the parent legislation. For those at home who might be watching because they are very interested in this debate the bill does change the amount of time after which a film can be first made available from 9 months to 5 months and it also makes sure that the legislation which expires on 31 October 2013 is extended to 31 October 2016. So that is in essence what is within this bill.It is a bill that has finely balanced support from the Labour Party members because although we disagree with some of the arguments made by the Government and the industry we have some concerns around the viability of smaller independent cinemas in areas outside of the main centres and also in rural areas. My colleague Clare Curran was earlier on rattling off a number of cinemas in areas around the country and she failed to mention one that is in my electorate which is the Light House Cinema atPāuatahanui. It is a lovely spot. If Mr Macindoe would like to visit some time I would quite happily take him to the movies.Tim Macindoe: I’d love to. If you’re paying I’ll be there.KRIS FAAFOI: You can take that up if you like. But the cinema is in a rural area of my electorate and it is one of these—Tim Macindoe: I haven’t seenMr Pip yet. Is it on?KRIS FAAFOI: I am not sure whetherMr Pip is on there. It is one of those independent cinemas that probably show morearthouse movies but from time to time it shows popular movies that we would see in some of the bigger chains like—does Hoyts still exist; it has been a long time since I have been to the movies—or the Reading Cinemas that you might see in central Wellington. It is what you would call a “destination cinema”; you go there because it is a bit different. There was concern from a number of these independent cinemas around the country and that is why we on this side of the Chamber—I think Clare Curran used the word “grudgingly”—have agreed to support this legislation to ensure that there is a period of grace for those smaller independent cinemas to be able to make the transition to using more digital technology and also be able to change their business model. I think that is also the case for some of the larger cinema operators.As I think Grant Robertson mentioned we do have some concerns that although this bill does address some issues around this industry does it really take a bigger-picture look at the copyright issues that we are faced with because of the rapid development of technology that we have at the moment? The Government did I think commit to a review of copyright and instead of doing that and following through with it it has decided to I guess you could say meet the requests of the larger cinema operators just to push the extension date out to 31 October 2016 and make sure that there is still a grace period even though it is changing from 9 months to 5 months. We do as I say have finely balanced support for this bill on those two points but it is very very guarded because we do think that it is the last chance for the cinema industry to make the changes it needs to make to the business model and to make sure that it is adapting to the digital technology that currently exists.We also had some concerns around this because of the way that the cinema industry is operating. We thought there was a degree of protectionism here because it wants a delay in the release on DVD of some movies. We believe that that was causing some cinemas to charge what we call—I think David Clark was talking about it—unreasonable prices to go to the movies. That was making it much more costly for Kiwi families to have an outing to the cinema and if the public was not able to legally obtain the material after it had been released elsewhere in the world they would get hold of it in some other illegal manner through the internet. That was another concern that we had on this side of the Chamber.We think that the time frame given to cinemas to change which at the moment is to the end of October 2016 is a little lenient. We believe that maybe to 2015 is plenty of time for them to make the innovative changes that they need to make in terms of technology. We hope that maybe some cinema operators will not take the full 3 years and may be able to make the transition to fully digital and also change their business models well before that. But as we say we think that 2 years is certainly enough time for them to change their ways.This bill and the need for more urgency around it have come about because of the changing technology. Back in the days when we watched our first movies—Grant Robertson has talked about being kicked out of a cinema for rollingjaffas and I understand that David Clark’s first movie was the second in theStar WarsseriesThe Empire Strikes Back and he has spoken about that at length in his contributions—when a movie was released it took years to get to New Zealand. But with the way that the internet operates at the moment you can almost instantly get a movie when it is released somewhere else. That makes it a bit of a farce we believe on this side of the Chamber that there is a delay in movies being shown at cinemas when they are released somewhere else in the world for I guess you could say their world premieres. We do not believe that the movie industry here has adapted enough to be able to move fast enough. It still needs protection for that first 5 months in this bill—it was that first 9 months in the previous Act—before those movies can be shown or sold on DVD here in New Zealand. Times have changed and that is why we believe that this legislation should change to meet the technology changes and the rapid increases in technology.As I say we do give this finely balanced support qualified support. We want to make sure that the big chains more or less move faster to adapt to the changes in technology and as I say—I will make this point again—to make sure that they change their technology and change their business model to one that works more fairly for consumers. But our support for this legislation is to protect the smaller operators in rural areas like the Light House Cinema inPāuatahanui Porirua and those outside the main areas. It is those cinema operators that stand to lose either quite a lot of money or their whole operation because they simply would not have the time or the wherewithal to beable to respond to the changes in the legislation. So we do support the bill in a qualified way. We understand that this will keep some of those smaller independent operators above water.Clause 1 agreed to.Clause 2 agreed to.Clause 3 agreed to.Clause 4 agreed to.Bill to be reported without amendment presently.