Finance Ministry Suggests State Fund for Benefit of Israel's Authors

Fund being suggested as an alternative to culture ministry's book bill which includes a provision that would require that books not be discounted for the first 18 months after they are published.

The Finance Ministry and Antitrust Commissioner David Gilo are waging a rearguard battle against a proposed bill on book pricing that is being discussed on Sunday by the Ministerial Committee for Legislation. The ministry has proposed that a government-financed fund be set up for the benefit of authors, but publishers have rejected the idea.

The proposed law includes a provision that would require that books not be discounted for the first 18 months after they are published, other than during specific limited periods of the year. In light of the support that the law has attracted from some of the country's leading authors - as a way of ensuring what they see as a fair return in the form of royalties for their work - the ministerial committee is expected to accede to public pressure and give its approval to the bill, meaning that the legislative process will proceed with the government's backing for the law.

The book pricing bill was developed by the Culture and Sports Ministry, which expects the retail price set by publishers under its proposed law to be lower than current stated prices. But the Finance Ministry is pushing an alternative to the bill. It contends that its suggestion would not distort the free market in the retail book industry and also not raise book prices. The two major bookstore chains, Steimatzky and Tzomet Sfarim, have been deeply discounting many book selections.

The size of the Finance Ministry's proposed fund in support of authors has not been stated, but similar funds already exist in other sectors of the Israeli cultural scene - including, for example, a NIS 67 million fund in support of cinema and NIS 73 million in direct annual state support for Israeli theaters.

The Finance Ministry suggests that the fund be overseen by public representatives to avoid political influence in the choice of funding recipients, who would be getting direct government support for their work.

The proposal was presented to the Culture Ministry and representatives of the country's publishers, but the publishers rejected the approach, saying they were concerned about political interference in the process.

Yaron Sadan, who chairs the Book Publishers Association of Israel, said he had not seen the details of the Finance Ministry's proposal, but a similar plan had been raised in the past. The proposal does not address the economic concentration in the retail book trade (where there are only two main competitors ) and was therefore rejected by the publishers and authors, he explained.

Finance Ministry sources have said they see the publishers' rejection of the Treasury's proposal as an excuse, because the book law that is to be considered by the Ministerial Committee for Legislation serves their financial interests, adding that the publishers' purported concern over the poor financial straits of some of the country's authors is simply a cover for support of the bill.

In addition to barring discounts on the regular retail price of new books for most of the first 18 months after they are published, the law would require the publishers to provide 8% in royalties to the authors on the first 6,000 copies and 10% thereafter during this period.

The Finance Ministry said this law would distort the free market in books and lead to possible higher prices, whereas financial assistance can be provided directly to authors instead. Antitrust Commissioner David Gilo has also expressed concern that higher book prices could result in falling book sales, particularly among the country's poor. "If we are the People of the Book," he said, "then we need to see to it that the books reach the people."