The 12-month idea doesn't recognize that it takes time to build an author or a book. It allows protection from importation when there is no risk of a book being imported. In most cases it is most unlikely for a book to have already been sold overseas by the time of first publication in Australia. For children's books (not something the Commission focussed on), overseas publishers want to see a track record here first before they purchase the rights. But when the book is a success the publisher and author have by then already lost the protection of territorial copyright, and aren't rewarded for the success.
This will make the mid-list, which is already under a lot of pressure, vanish. And the book market will come to be dominated by fewer and fewer "big-name" authors who will sell more, as they grow older. We will see fewer new Australian authors in bookshops, and fewer in turn will succeed. The next generation of truly successful authors (who earn as much as, say, an average football player) would have been coming from that now extinct mid-list.
One reason for the demise of the mid-list is that many of the large publishers/distributors don't hold stock in their warehouses for any period of time. A book either works immediately - or it doesn't. Setting a 12-month window will exacerbate this effect.
I don't think we can under-estimate the importance of books in reflecting, creating and securing an Australian culture.
Our sense of ourselves is already being eroded by the rising waters of globalization. Soon we won't have a voice to take to the world unless there is a sense in our community that we have a voice we're prepared to defend. In time (under the 12 month rule) we will have less of a sense of ourselves and of our culture, and of our uniqueness. We're becoming pale versions of Americans (and the Americans do such an admirable job of celebrating themselves and their culture), and if the 12-month proposal gets up we've made another step along that path.