Art Resale Royalty Scheme Reality

The Government have announced the resale royalty scheme they committed to introducing will become reality. It's a very interesting situation indeed.

I'm all for anything that will put more money into the pockets of Artists and their families. Whether this royalty scheme is the way to go, is hard to say. Details haven't been finalised yet however it would be safe to say that this is going to create a big shake up in the arts industry and may create more problems than it solves.

One question that needs to be asked now is "what is Art", and "what qualifies and what doesn't and if it doesn't what right does the person who believes they have a legitimate claim to participation in the royalty scheme have"?

The proverbial can of worms that this opens is enormous. It shouldn't be possible for one section of the art sector to participate in this scheme when others who justifiably have a claim can not. So I'm guessing that the royalty scheme will cover all types and areas of Art in Australia. Where does that begin and end?

There is some unique as well as weird and wacky stuff out there considered by the creator and it's admirers to be ART.

It may sound like i am being pedantic to make a point, however i strongly believe that it is a genuine issue and one that is not easily solved. As an example just off the top of my head, and I'm sure there are many better ones, imagine a car enthusiast who restores a car and adds a completely unique artwork to the entire car through a custom paint job. The owner may very well consider it more a piece of unique Australian Art than a car. If he was to sell it and then down the track it's value increased dramatically and it was resold, could he expect a royalty?

Music is considered art. Does that mean they now have another royalty avenue to pursue? Could that old collection of vinyl records that is suddenly popular again or holds a rare "unknown" recording from a famous musician incur a payment to the owner?

I have a Ricky Ponting signed limited edition framed print. If Ricky cements his place as one of the greatest batsman of all time and i decide to auction it down the track am i required to pay a royalty to Channel Nine who licence the product and flog them mercilessly in between every over of a cricket game? Or is memorabilia not art? What if it was unique compared to others or a one one off? Art prints are not unique and they are considered most definitely art.

Britannica Online defines art as "the use of skill and imagination in the creation of aesthetic objects, environments, or experiences that can be shared with others."

Wikipedia states:

Art refers to a diverse range of human activities, creations, and expressions that are appealing or attractive to the senses or have some significance to the mind of an individual. The word "art" may be used to cover all or any of the arts, including music, literature and other forms. It is most often used to refer specifically to the visual arts, including media such as painting, sculpture, and printmaking. However it can also be applied to forms of art that stimulate the other senses, such as music, an auditory art. Aesthetics is the branch of philosophy which considers art.

http://en.wikipedia.org/wiki/Art

As you can see, it's a mine field!

There are other issues as well. What if an artwork is resold multiple times overseas? What obligation would the owner of an artwork purchased overseas from someone already overseas have? How could the integrity of the system be upheld? More importantly, does this create a potential "loop hole"

Whilst this scheme has clearly been aimed at the Aboriginal Art sector of the market, you can't have one rule for Aboriginal art and a different one for art from every non indigenous sector.

Other issues also arise relating to the estates of many deceased artists. Often there is conjecture as too who has legitimate claim. This scheme may complicate and magnify these issues. Could this lead to protracted legal fights with claims and counter claims?

The other issue, which is a major one is that the market may "factor in" these potential royalties in advance. This may mean that buyers will expect to pay less upfront for a artwork knowing they may have to pay a royalty down the track. If the market does this, then the galleries and dealers may have to factor that in when determining how much to pay the artist for a piece. This would seem almost a certainty, the big question is, how may artists will be happy to receive less today for their work, with the possibility that they may get a "kickback" down the track, and that's a big maybe! And it very well maybe after they have departed this world.

If you know Artists, many will not be happy with that situation.

I think Adrian Newstead makes some very valid points in the article below. It's also interesting to note that the Government Senate Inquiry rejected the proposal for the scheme.

I also respect that some artists and associated people within the industry believe this scheme is a very good thing and i understand why they believe that. Whether that turns out to be true in reality is very much up in the air. There are many issues that this creates to solve a perceived problem that possibly could be addressed in other ways that wouldn't have such wide spread and unquantifiable issues for the industry.

Only time will tell and hopefully as more details come to hand some of the issues raised will be eliminated.

Artists to be paid for every sale, forever more

Clifford Possum Tjapaltjarri's 1977 work Warlugulong, which sold for $2.4 million.
Photo: James Davies

Richard Jinman and Joel Gibson
August 8, 2008

AS AUSTRALIAN art continues its record-breaking run at auction, the Federal Government has come good on a promise to share the spoils with artists and their families.

It is determined to introduce a resale royalty scheme this year giving artists a percentage of the sale price whenever their work is sold. The details have yet to be finalised but some industry bodies have called for a flat rate of 5 per cent on all sales and for the royalty to apply to all works sold for more than $500. That would mean an artist who sold a work 10 years ago for $500 could reap up to $10,000 if it was sold again for 200,000.

For some artists, particularly big names such as the late Clifford Possum Tjapaltjarri and Brett Whiteley, whose work has sold for record prices since their deaths, the scheme will generate large sums of money as their paintings are sold again and again on the secondary market.

The Government committed itself to the resale royalty yesterday as part of its response to last year's senate inquiry into the indigenous art market.

It says the scheme will not only benefit famous artists and their estates. If the threshold is set low it will also benefit thousands of less famous artists such as Jeffrey Samuels, 51, who has been painting since he was seven.

For Samuels, whose work is owned by the Art Gallery of NSW, it was "about time" the art industry developed a conscience. The Ngemba man from Bourke subsists on welfare and has never been informed of a resale of any of his works.

The Arts Minister, Peter Garrett, said the resale royalty and a new code of conduct to regulate the industry were cornerstones of the Government's efforts to bolster and clean up an industry blighted by exploitation.

"I think we're really starting to describe a pretty substantial agenda for the future," he said.

But the Government's determination to install a resale royalty - a move the Senate inquiry rejected - was condemned by the art consultant, Adrian Newstead. He says it will be "an absolute disaster" for the indigenous and non-indigenous art markets which are already starting to falter in weakening economic conditions.

Mr Newstead says a "very, very small number" of works by indigenous artists have sold for more than $100,000. "Only 17 living and deceased indigenous artists have generated secondary market sales in excess of $1 million. Had there been a resale royalty on indigenous art since 1994, 86 per cent of all the money that would have been collected would have gone into the estates of seven dead artists."

Mr Newstead said the royalty was a distraction from other, more difficult, issues.

"A resale royalty is no substitute whatsoever for enlightened government policy in the area of indigenous health, education and community development. This is the Government's responsibility, not the responsibility of people who sympathise with Aboriginal aspirations and put their money directly into their pockets."

There was criticism, too, of the Government's decision to back a system of self-regulation for a market often characterised by the exploitation of artists by so-called carpetbaggers. An art market analyst, Michael Reid, said self-regulation was doomed to failure and the Government should have launched a "focused strike" on exploitation using legislation.

"I pushed the importance of the accreditation of art dealers just as you accredit taxi drivers, dentists and even lawyers. We need to respond vigorously with immediate codification in terms of the law in terms of who can and who can't deal in Aboriginal art. Those people who will opt into the code, we don't need to regulate, and those who don't need to be regulated."

But the royalty deal was "amazing" news for artists, said the celebrated Yolngu artist Gulumbu Yunupingu, 61, from Gunyungarra in Arnhem Land. The eldest sister of Aboriginal leaders Galarrwuy and Mandawuy Yunupingu, she has seen her works bought for $800 and resold for $6000. Her value has soared in recent years after she won the 2004 National Aboriginal and Torres Straight Islander Art award and was one of seven indigenous Australian artists selected to create site-specific works for the Musee du quai Branly in Paris in 2006.

At the Garma indigenous festival yesterday, she said: "We have been trying for maybe seven years to get this done. I'm very thankful to Mr Garrett. It's an important step for many, many artists like me."

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