Opinion Number. 1376

Subject

Customs power to prohibit importation of Cinematograph films with view to assisting establishment of australian film producing industry: restriction to percentage of australian requirements: imposition of condition that importers purchase, exhibit or export australian films: establishment of dispute committee

Key Legislation

Customs Act 1901 s 52

Date
Client
The Comptroller-General, Department of Trade and Customs

The Comptroller-General of Customs has forwarded me the following memorandum for advice:

In connection with the importation of cinematograph films into Australia, my Minister desires to know whether he has the necessary legal powers under the present Customs Act 1901–1922 or can obtain such by the enactment of special legislation to take action along the lines as outlined hereunder.

With a view to assisting the establishment of the cinematograph film producing industry in Australia (particularly with regard to what is, in the trade, termed ‘feature’ films) it is proposed to take steps to restrict the importation of foreign feature films to a certain percentage of local requirements. The local requirements of such films will be ascertained after very careful and thorough enquiry and such number as is declared sufficient for local requirements will form the basis for determining the number of feature films permitted entry into Australia. The artificial shortage thus created will, it is hoped, furnish an opening for British and Australian productions of an approved standard.

In addition to and in conjunction with the above restriction it is also proposed to put into operation when considered advisable a scheme whereby each importer of foreign feature films will require to produce in Australia or purchase the exhibition rights of an Australian produced feature film or films of an approved standard for exhibition abroad. (In explanation it might be mentioned that a cinematograph film is very rarely sold outright but only the exhibition rights for a certain country or countries). A ratio would be determined after due enquiry as to the number of foreign films permitted entry to each Australian film produced. In arriving at this ratio due regard would be given to the number of feature films produced in Australia per annum. The provisions of any regulation issued in respect of this scheme would necessarily have to be of an elastic nature as the ratio determined at the initial stages would require to be improved in favour of Australian films as Australian production advances. To illustrate the operation of this scheme:

In the initial stages say the production of Australian feature films was one to every forty imported then the ratio determined would be forty foreign films permitted entry on the distinct condition that the exhibition rights of one Australian feature film of an approved standard had to be purchased for exhibition abroad. It is not intended that film importing Companies which also produce films of an approval standard in Australia and export same in accordance with the proclaimed ratio be required to purchase other Australian films in excess of the ratio. In these cases the films will not be ‘purchased’ but ‘produced’ by the Companies concerned. (It is, of course, distinctly understood that the fact that such film was or was not shown abroad after purchase would not affect the issue at all.)

As Australian production advances the ratio would be so regulated as to absorb all such approved Australian productions until the ratio could be placed on a 50–50 basis.

The terms of the security or guarantee entered into by the film importer or film importing Company would need to provide that the Australian film or films to be produced or purchased for export abroad be so produced or purchased within six or twelve months from the date of entering into security or guarantee. This proviso would be of advantage both to Australian producer and purchaser, as at the time of importation of a large consignment of films the requisite number of Australian films may not be available. This extended period would afford Australian producers time in which to produce such films as are required, whilst at the same time affording the importer the opportunity of inspecting and selecting from the Australian productions.

Provision would also require to be made against the possibility of Australian films produced prior to the publication of this scheme coming within the operation of the scheme. In this connection it is intended to proclaim a certain date and only those Australian films produced after that date will be regarded as coming within the operation of the scheme.

The Australian film would have to be of an approved standard, particularly regarding length, quality of printing, etc. and subject matter, the power to express approval being vested in a Board or Committee consisting of say two experts from the film industry and the Chief Censor, the latter to act as Chairman.

It is anticipated that the greatest difficulty to be encountered under this import–export restriction will be the question of the price paid by the importer to the Australian producer.

It is not intended that Australian film producers be permitted to take undue advantage of the imposition of the aforementioned restriction by demanding exorbitant prices for their feature productions from the film importers. If any action could be taken by the Commonwealth to grant the abovementioned Board or Committee power to determine a reasonable price in cases of dispute between Australian producer and film importer it would greatly facilitate the operation of the Scheme.

As the success of the scheme is dependent upon so many outside factors, such as local and British production, the quality and price of same, and the public’s reception of such productions and certain strenuous opposition from the vested film importing interests can only be expected to defeat if possible both schemes it is essential that the Minister have power to suspend at any time he thinks fit any or all the provisions of the two schemes, without resorting to the cancellation of the proclamation or other instrument of authority containing the power to enforce the operation of the schemes.

I shall be glad therefore if the Secretary will kindly favour me with an expression of opinion regarding the following questions:

  1. Has the Minister for Trade and Customs the necessary legal powers under the Customs Act 1901–1923 to restrict the importation of foreign films to a certain percentage of Australian requirements, by prohibiting the importation of cinematograph films and admitting by licence?
  2. Has the Minister for Trade and Customs the necessary legal powers under the Customs Act 1901–1923 to restrict the importation of foreign films to a certain percentage of Australian requirements and to require the importers of foreign films to produce in Australia or purchase the exhibition rights of an Australian produced film and export such film abroad in accordance with a proclaimed ratio as outlined in the scheme above?
  3. If the answers to Questions 1 and 2 are in the negative would the enactment of special legislation to give effect to the two schemes be ultra vires the Constitution?
  4. If the answers to Questions 1 and 2 are in the affirmative would it be necessary to embody the authority for the schemes in the same proclamation as that governing the censorship of imported films?
  5. If the answers to Questions Nos. 1 and 2 are in the affirmative would it be possible to legally grant power to any Board or Committee as mentioned above in pursuance of the Import-Export Restriction Scheme to determine, in cases of dispute between film importer and Australian film producer, what is a reasonable minimum purchase price for Australian produced films?

The answers to the list questions are as follows:

  1. The importation of cinematograph films may be prohibited by proclamation under section 52 of the Customs Act 1901–1923 and such importation may be made subject to licence and to approval by the Minister.
  2. I think this could be made a condition governing importation.
  3. In view of above advice it is not necessary to answer this question.
  4. I think it would be desirable, although perhaps not necessary, to embody all conditions governing importation in one proclamation.
  5. This is a matter which might be controlled by the Minister under his suggested power of refusing approval of imports. The Committee might be constituted under Ministerial authority and where the price offered by the importer for local production is, in the opinion of the Committee, unreasonably low, the Minister could withhold approval of imports. Where the price demanded by the Australian producer is, in the opinion of the Committee, unreasonably high, the Minister could relax the limitation on imports.

It is suggested that, before any proclamation is issued or regulations made to carry into effect the proposals above referred to, the draft proclamation or regulations be forwarded to this office for consideration.

[Vol. 22, p. 326]