Peter Garrett (Kingsford Smith, Australian Labor Party, Minister for the Environment, Heritage and the Arts) Share this | Link to this | Hansard source

by leave—On Friday 3 October I announced the government’s intention to introduce a resale royalty right by 1 July 2009. This is a landmark and genuinely historic moment for the more than 20,000 Australian visual artists. This government recognises and values the work of our artists; we are committed to enlarging the creative opportunities for artists to contribute to our economy, community and identity.

The decision to introduce a resale royalty right for visual artists has been a long time coming. The introduction of a resale royalty was discussed as early as 1997 in the Aboriginal and Torres Strait Islander Commission (ATSIC) National Aboriginal and Torres Strait Islander Cultural Industry Strategy. In 1998 the Australian Institute of Aboriginal and Torres Strait Islander Studies report Our culture, our future: report on Australian Indigenous cultural and intellectual property called for a resale royalty right to be recognised. In 2002 Rupert Myer, respected arts patron, philanthropist and the current chair of the National Gallery of Australia, in his report on the Contemporary Visual Arts and Craft Inquiry, recommended the Commonwealth government introduce a resale royalty scheme. Further, in 2003 Professor David Throsby and Virginia Hollister conducted a study for the Australia Council for the Arts which found, despite being highly trained, visual artists to be among the most poorly remunerated of all artists. Labor Party policy reflected these findings, including through the introduction of private members’ bills by Senator Kate Lundy in 2004 and the member for Fraser, Bob McMullan, in 2006.

But it is not until today that the government in this House has committed to introducing stand-alone legislation to implement such a scheme. It has taken a while but we got there in the end. This government is proud of its efforts to put the arts centrestage. We have never shied away from openly advocating the critical role of the arts and artists in our society nor the significant contribution they make. At the last election we enunciated a detailed and comprehensive set of arts policies which included introducing a resale royalty scheme. These election commitments were welcomed by the sector as a firm commitment to encouraging, innervating and supporting this country’s cultural life. In fact, at the time the only dissenting voice on resale royalty and supporting artists generally came from the former Treasurer, the member for Higgins.

The Australian visual arts market throws up its fair share of big news and big money. Recognising there are always movements in any market, it is clear that over time we have seen a general appreciation in value of the secondary art market in Australia. However, in most of these cases, the artist will receive nothing, having sold the work for a substantially smaller figure earlier on in their career. A resale royalty right for visual artists will help redress this imbalance by entitling artists to a portion of the proceeds from the resale of their works. By enshrining in law the right of artists and their heirs to receive a benefit from the secondary sale of their work, this government is helping to build an environment where the talent and creativity of visual artists receives greater reward and recognition.

In the last 20 years the value of auction art sales in Australia has climbed dramatically, including an incredible jump of nearly 70 per cent in 2007 alone. Sadly, local artists have not shared in the benefits of this frenetic activity. Clifford Possum Tjapaltjarri’s spectacular painting Warlugulong is a well-known example of how sharply a work of art can appreciate in value. Originally sold for just $1,200 in 1977, it was resold for $36,000 in 1996 and was eventually purchased at auction last year for a staggering $2.4 million—the highest price ever paid for a work of art by an Indigenous artist. The introduction of a resale royalty right for Australian visual artists is an important acknowledgement of the contribution artists make to our country’s cultural landscape and that they deserve the opportunity to share fairly in the increasing value of their work.

In Australia, regrettably, we have been slow to recognise the right of artists to derive an ongoing benefit from their work. It is the case that many visual artists subsist on meagre incomes and, whilst the ongoing connection between artists and their work is recognised in Australia and around the world through moral rights legislation, the introduction of a resale royalty right will give visual artists an economic interest in their work as well. This important right puts them on the same footing as writers and composers, who are able to earn income from their work on an ongoing basis through copyright. It is important to note that the scheme we will introduce has been informed by an extensive series of discussions and consultations with the sector which included artists, art market professionals and the auction houses.

The government recognises that it is vitally important we get the balance right, and this scheme achieves that. It also achieves the certainty the sector requires for a sustainable and profitable industry for both artists and sellers. It brings fairness to the visual arts sector so that artists can enjoy the fruits of their success. Under the Australian Resale Royalty Scheme, artists will receive a royalty payment of five per cent of the sale price each time their work is resold through an auction house, a commercial gallery or an art dealer for $1,000 or more. The simple five per cent flat royalty rate will make the scheme easy to understand and administer and the threshold price of $1,000 will benefit a high proportion of artists represented in the secondary market while making the scheme cost effective to manage.

The Resale Royalty Scheme will cover many kinds of artworks: paintings on canvas; bark paintings; wood carvings; sculptures; textiles like batik; weavings and basketry; prints like linocuts, etchings or screen prints; and many other ways that artists work today.

The scheme will also recognise joint creation of art works, a very important feature for artists who paint canvases together in Indigenous communities. It means that, if two or more artists work together to paint a canvas or to carve a sculpture, for instance, and this joint work is acknowledged, they can all share in the royalties from future resales. Just as single artists can pass on their right to their estate, joint artists will be able to pass on their right to their own heirs. This resale royalty right will apply to works by living artists and for a period of 70 years after an artist’s death, with the right being passed on to the beneficiaries of artists’ wills, including Indigenous communities and charities. This puts it in line with current copyright arrangements for other creators like authors.

Through international reciprocity arrangements, Australian artists will also be able to benefit from resales of their work in other countries with a Resale Royalty Scheme, including in the European Union. At present a resale royalty right operates in over 50 countries, from European Union nations, to South American countries, like Brazil, Bolivia and Paraguay, and a number of African nations, including Algeria, Ivory Coast and Morocco. In the United Kingdom, the introduction of a resale royalty has been a success.

In Australia, the royalty will be collected by a collecting organisation that will be responsible for keeping track of who was owed a royalty from which sale and then making the payments. That will be conducted in a cost-effective manner to maximise benefits to artists.

In the last budget the government provided $1.5 million over three years to support the costs of establishing the Resale Royalty Scheme, including monitoring collection and distribution of the royalty revenue. The scheme’s great virtue is that it is clear and straightforward in terms of how the right applies. The collecting organisation will have the capacity to make sure it is able to deliver a scheme which is accountable, which is well understood and which delivers to artists the benefit they deserve. The government will appoint the collecting organisation following a competitive tender process.

We have chosen design specifications for the scheme to reflect the particular characteristics of the Australian art market. Importantly, the scheme balances two sets of interests: on the one hand, it recognises the unique characteristics of the Australian art market and provides certainty; while on the other hand, it ensures the opportunity for artists to benefit from the future success of their work. To provide certainty for the market, the resale royalty right will only apply to resales where the seller has acquired the work of art after the scheme takes effect. This arrangement will allow businesses in the Australian art market to adjust to this change in their operating environment, ensuring a smooth transition to the scheme.

While the right will apply to all visual artists, I make no secret of the fact that one of the government’s motives in introducing this scheme was the very real benefits it will bring to Indigenous artists and their communities. I announced the government’s intention to introduce a resale royalty right in Alice Springs at the Papunya Tula Gallery. Australia’s Indigenous arts movement is one of the most significant artistic movements of the 20th century. Contemporary Aboriginal art continues to evolve and to challenge. It is dynamic, it is diverse and it is informed by strong culture. It is this strength that underpins its success, at home and across the world. Incredibly, the Emily Kame Kngwarreye exhibition which toured Japan earlier this year even surpassed the attendance records previously held by an Andy Warhol exhibition.

The government recognises the important cultural and economic contribution made by the visual arts and crafts sector, particularly to Indigenous communities. We are committed to strengthening opportunities for Indigenous visual artists practicing across Australia as well as the wider visual arts community. We have already put in place measures to strengthen Indigenous art practice by investing additional funding in Aboriginal art centres—some $7.6 million over four years. We are also determined that the Indigenous Visual Arts Commercial Code of Conduct be finalised as a priority.

Additionally and critically, there will be regulatory benefits for Indigenous artists through improved transparency and record keeping in the market. This will result in greater tracking of sales on the secondary market. This is important, because poor or sometimes a complete lack of record keeping was highlighted as a barrier to ethical commerce in the recent Senate inquiry into the Indigenous visual art sector.

To give an example of how the scheme will work in practice, let us say that in July 2009, after the proposed resale royalty right legislation has come into effect, a gallery owner negotiates with an Indigenous art centre the outright purchase of a range of works. One canvas is purchased for $10,000. The gallery owner then puts the work up for sale at exhibition several months later in December 2009 and the canvas is purchased by an investor for $16,000. Under the government’s resale royalty right, a royalty payment to the artist of $800, less a small administration fee, is triggered as the gallery owner acquired the work following the introduction of the resale royalty right.

The campaign for a resale royalty right has featured prominently in this country for decades as artists and those concerned with issues of fairness and adequate remuneration have attempted to be heard. On this basis alone, the introduction of a scheme is an incredibly significant moment for Australia’s visual artists. Those creators who toil with paintbrush, clay, glasswork or photographic negative, often times for very little reward but spurred on by their ambition, will now have a fair share in any future success their work achieves. By giving artists a fair go, this government is laying the foundation for future creative success for Australia and for Australian artists.

I ask leave of the House to move a motion to allow the member for Moncrieff to speak for 13½ minutes.

Leave granted.

by leave—I move:

That so much of the standing orders be suspended as would prevent the member for Moncrieff speaking for a period not exceeding 13½ minutes.

Question agreed to.

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source

I welcome the opportunity to contribute to the debate about the Rudd government’s commitment to the arts and, in this particular case, the government’s commitment to visual artists. The notion of introducing resale royalties in Australia has been discussed periodically for some 20 years now. I certainly look forward to the government releasing the full details of their proposal so the debate in these times can be a fully informed one. I join with the minister in recognising the work of Aboriginal artists. Today the arts and cultural sectors in Australia are recognised worldwide for our exemplary Australian visual, performing and literary artists and art companies. It is estimated that cultural industries contribute around 3.3 per cent of Australia’s domestic production, worth almost $38 billion a year. At the 2001 census, more than 270,000 Australians were listed as being employed in cultural industries. The coalition recognises that Australian arts and culture are characterised by a rich diversity of art forms practised across the breadth of this vast country. We support the arts and are determined to ensure that all regions of Australia are able to benefit from the cultural and economic benefits of a strong and secure arts sector.

Australia’s Indigenous art is becoming increasingly renowned around the world for its quality and its unique style. Importantly, Indigenous art generates employment and cultural activity, as well as significant economic opportunity in Indigenous communities. Functioning art centres contribute to a healthy community as these centres play a crucial role in broader family and community social support. They are generally owned and controlled by Indigenous people and facilitate the production of art by Indigenous people. In many remote communities art centres provide a major source of self-generated income, as well as providing an important platform for cultural maintenance and education. The Indigenous art industry includes some major success stories such as Papunya Tula artists in Kintore in Central Australia. This Aboriginal owned enterprise is built around the successful art practice of around 150 artists, attracting substantial national and international interest. From humble beginnings in the 1970s, the company is now fully self-sufficient with a gallery in Alice Springs and generating enough profits to support specific community projects such as dialysis facilities, a community swimming pool and the construction of a new arts centre building.

The coalition is committed to supporting Indigenous art and culture by ensuring real economic and social benefits for the sector, its sustainability and its future needs. As the speech of the Minister for the Environment, Heritage and the Arts today highlighted, once again the Rudd government is all too interested in symbolism without a care for actually delivering meaningful outcomes to Australia’s visual artists. We speak today on the government’s proposed resale royalty scheme for which the legislation that will govern the proposed scheme is yet to be released, even as a draft. Of course, the minister is happy to refer the House to those in the arts sector who may support the scheme on the details available thus far, but he has ignored those concerns that do exist about this proposal.

The coalition is committed to better outcomes for Australia’s visual artists and has a strong track record in delivering for them. In the 2006-07 budget, the then coalition government delivered a $6 million package over four years to provide meaningful targeted assistance to visual artists, regardless of whether their work reached the secondary market. This package included $500,000 per annum for a training package to help visual artists enhance their engagement with the commercial arts market and $1 million per annum to strengthen the Indigenous visual arts industry in regional and remote communities. This funding was designed to provide direct benefits to Australian artists, the support of which, of course, extended beyond just late career artists and the estates of deceased artists. The coalition delivered record levels of funding to the arts sector. Funding for the Australia Council to provide arts grants at arm’s length from government increased by more than 220 per cent since the last Labor budget in 1995-96. Last year, more than eight million Australians attended Australia Council cultural activities.

As we all know too well, when it comes to Labor Party policy the devil is most certainly in the detail. The coalition will, of course, carefully examine the legislation that Labor puts forward on this proposal. The minister refers to the 2002 report by the current Chairman of the National Gallery of Australia, Rupert Myer. I note that this report was commissioned by the then coalition government. The Myer report noted that the effects that resale royalties would have on the Australian art market are unclear. The Myer report concluded that such a scheme may benefit artists in the following ways: by providing artists with a contingent income stream which is not currently available; by empowering artists by allowing them to enjoy a direct economic benefit from the success of the work; and by recognising the ongoing relationship between the artist and their work and the extent to which an artist’s reputation is linked to the physical products of their creative labour.

Following the Myer report, a discussion paper on a proposed resale royalty arrangement was released by the then Department of Communications, Information Technology and the Arts. This report noted that it is often argued that implementing a resale royalty scheme would increase the income of contemporary visual artists. In the Australian context, and indeed in the context of the current proposal by the government, this is presented as being particularly important for Indigenous artists. Research presented in the report suggested that, in terms of income supplementation, resale royalty schemes bring most benefit to successful late career artists with strong reputations whose work is regularly traded and only brings limited benefits for emerging and less successful artists.

I have been made aware of concerns within the arts sector at the current right of term proposals. I am advised the experiences of similar schemes overseas have shown collecting royalties for deceased artists and their estates can be more difficult to track, creating an unnecessary administrative burden on art resellers and collecting agencies. I understand the United Kingdom scheme currently applies to living artists only. I look forward to the government’s response to these concerns.

The government has not yet clarified whether the royalty will apply to the hammer price achieved at auction or whether premiums and taxes applied to art resales will be included in the sale price subject to the royalty. I am advised that similar schemes in the United Kingdom and Europe apply a maximum threshold of €12,500 for any single work each time it is sold. The intention of this cap is to prevent high-value artworks being sold offshore. The government has not clarified why it has not adopted such a cap nor has it acknowledged the implications of such a decision.

There exists some uncertainty about which transactions will be encompassed by the government’s scheme. Will electronic intermediaries be treated differently from traditional resellers in determining whether a transaction is a public or a private one? Would, for example, eBay be treated as an auction house in the same way as Sotheby’s or Bonhams and Goodman. The government is yet to answer these questions. Ignoring the concerns which exist in the sector will not serve the minister well. Indeed, doing so will only foster an alternative, black market for artwork sales in Australia or a resulting offshore market, both of which will disadvantage visual artists, art collectors and art resellers alike. Certainly an alternative private art market in Australia would raise additional issues surrounding artwork title and insurance and only serve to destabilise the Australian arts sector and our national collecting institutions.

I have committed to consulting widely with the industry before the coalition concludes a position on the government’s proposal, and I look forward to meeting with visual artists and their representatives as well as art resellers and collectors and the intermediaries. While I await the opportunity to view to draft legislation on the government’s proposed scheme, I am pleased to commit the coalition to ensuring the welfare of our visual artists, having taken all the matters I have raised today and others fully into account.