But major booksellers including Dymocks, Kmart and Woolworths have said the Government's decision is a move towards protectionism and a closed market.
Tony Nash, chief executive of online bookstore Booktopia, says the Government's decision to knock back the proposals, originally introduced by small business minister Craig Emerson, is a win for his business.
"Booktopia has grown in a closed market environment. We bring in books from overseas and that gives us an advantage. But for the industry as a whole, this will also force publishers to reduce their prices because they are in competition with online stores, and if they do that more people will buy locally and get better prices."
"Additionally, as we become more of a household name it's going to become harder for local stores to compete. Ordering online is just getting so much better and is becoming part of the Australian way of life."
The Federal Government has rejected two proposals, one for parallel imports of books from overseas and another designed by Emerson as a "compromise plan".
Under current rules, publishers work under a "90-day rule" that requires publishers to maintain a steady supply of books to retailers. They forfeit parallel import protections if a bookseller requests the publisher supplies a book, but they do not reply within seven days saying they could supply it within 90 days. Import protections are also forfeited if the publisher has not supplied the book within 90 days.
A second 30-day rule also stipulates that publishers must supply a book to the Australian market within 30 days of its publication, and if it is not supplied then the local copyright holder forsakes all copyright privileges. That means booksellers can import that book directly from any overseas supplier.
Emerson's reform would have seen Australian publishers required to print works for which they hold copyright within just one week of international release, rather than the current 90-day limit.
Instead, the current laws will see traditional booksellers continue to battle with internet stores which import books from publishers overseas.
"Competition from internet and online booksellers will apply competitive pressure on both price and speed of availability, so we decided it wasn't warranted to change the regulations," Emerson said in a statement.
The Printing Industries Association of Australia also welcomed the rejection, calling the move a "victory for common sense".
The association has previously said that printing a new title within one week of an international release is impossible, and that the 30-day rule allows different publishers to stay on a level playing field.
"We are all aware of the challenges from electronic media and the publishing-to-market time requirements. It's all part of what our industries are currently dealing with on a daily basis. The Australian book printing industry is both commercially sustainable and environmentally friendly in contrast to some other communications mediums," chief executive Philip Anderson said in a statement.
"In contrast to any other communications product, Australian produced books, along with other printed matter, are recyclable and originate from wood fibre that is sustainably harvested from plantation forests. These forests create additional carbon storage with every regrown tree. No other medium can claim such sustainability."
But the Coalition for Cheaper Books, which represents Dymocks, Woolworths, Kmart and Coles, has said the fight isn't over and they will continue to lobby for reform.
The book industry is lobbying for reform due to the rise of internet bookshops which can import new titles faster than bricks-and-mortar stores can stock them on shelves. As a result, representatives claim jobs will be lost as more work moves online.
"By walking away from reform entirely, the Rudd Government has shown that they put protectionism first... the consequences for jobs and this industry mean we simply cannot let it rest here," Dymocks chief executive Don Grover said in a statement. "The Government has caved in to a campaign waged by the beneficiaries of this closed market."
Australian Booksellers Association chief executive Malcolm Neil said in a statement the decision has left the industry "dangerously exposed" to internet sellers.
"We are going to have to have serious talks with publishers about doing things faster and better because this is already a problem and it will only get bigger," he said.
