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

I rise this morning in response to the House of Representatives Standing Committee on Climate Change, Water, Environment and the Arts report into the Resale Royalty Right for Visual Artists Bill 2008. It is worth acknowledging the journey that has brought us to this point. The concept of resale royalty rights for artists has existed for some time. A number of reviews have been undertaken over the years suggesting that a resale royalty right is perhaps the best way forward to ensure that the natural barriers to visual artists receiving an income stream from their work—as opposed to the income stream that is able to be achieved by those that record music, for example, or by authors of works of literature—do not prevent them from receiving that income stream. One way of addressing this difference between visual artists and musicians or other artists—and this has been put forward under the Berne convention—

A division having been called in the House of Representatives—

In continuation, resale royalty right is a concept that has been developed in accordance with the Berne convention to look at rewarding visual artists by providing an income stream which essentially is directed at putting them on the same footing as musicians or authors of books. I know this was a commitment of the Labor government and is a commitment that has been followed through by the Minister for the Environment, Heritage and the Arts, the member for Kingsford Smith. What is also very clear is that once again the Australian Labor Party has not taken into account the very legitimate concerns that have been raised in the development of this Resale Royalty Right for Visual Artists Bill 2008. Perhaps mindful of that, the minister on the first reading speech directed the legislation to the Standing Committee on Climate Change, Water, Environment and the Arts in order to obtain the committee’s views on the bill. This of itself was interesting. I was surprised that the minister referred it to a House of Representatives committee. It is not a common practice and in fact, as all members would know, typically these types of matters are referred to Senate committees for review. The cynic might say the minister did it because he knew that in the House of Representatives the Labor government controls the majority of the committee. As it turns out, the committee report was supported by both coalition and Labor members. What is crystal clear in this committee’s report is that the bill in its current shape is fundamentally flawed.

The question may also be posed whether the bill is so badly flawed that it is unworkable in its current concept. There are a variety of views as to how fatal the flaws in this bill are, but what is clear from this report from the committee is that their very specific recommendation to the minister is that the legislation not be continued with, the bill not be proceeded with. It said:

The committee was mindful of these competing views throughout its deliberations and it has concluded that a number of matters need to be further investigated before the bill proceeds.

The competing views that that sentence refers to are essentially two principal views that are put forward on this bill. The committee summarises that there is widespread support for the resale royalty scheme but also notes that those supporters typically feel that the current legislation would deliver very little by way of royalties to artists at the commencement of the proposed scheme and also the view that the proposed scheme is out of step with other schemes already in place internationally. On the other hand there are those who believe that any sort of royalty scheme will only benefit relatively few, and in fact literally a handful of already successful artists and/or their estates, and the imposition of another levy on art purchases will adversely affect the primary art market and future resales of art work may as a consequence go offshore and be sold in other markets where no resale royalty right scheme exists.

They are the two principal points of view that are put forward. What is also clear is that the committee—and I notice that there is a member of the committee here and I will be interested in their comments—has stated unequivocally that the bill that is before the House requires much further investigation before it can proceed. This also highlights that this bill as it currently stands should not be proceeded with. The minister’s timetable of the introduction of this from 1 July is blown out of the water. I have to say on behalf of the arts community that I have been talking with a large number of artists, with intermediaries in galleries and with some of the significant collectors of Australian artworks, and universally across-the-board I would say to the minister that there is condemnation of this flawed bill. This committee report highlights why there is condemnation of this flawed bill, and it is time that this minister stood up, took a graceful back step, acknowledged the fundamental flaws in this legislation, acknowledged that he has got it very wrong, and acknowledged that the department, although I am sure they have used their bona fides and best efforts in drafting this bill, have made a number of mistakes. It is time that this minister listened to the views of me and the opposition as well as the views of those stakeholders in the arts community and fundamentally addressed the concerns that have been raised. Whether it is clause 11, which deals with the retrospectivity issue, or whether it is the broad operation of the resale scheme or whether there should be a cap—a whole raft of issues that the committee has considered in this report need to be looked at and closely evaluated by the minister and by the department before going forward.

My concern and the concern raised by this committee—and we share indeed a number of the concerns—can be summed up really by illustrating one key point. Perhaps the single-largest area of friction in the bill as it is presented at the moment is the non-retrospective nature of the bill—in other words, the committee has highlighted that the bill as it stands will only apply to the secondary sale and will only embrace a very small number of artworks on an ongoing basis. It could even be suggested that in its current proposed form the bill will have such a narrow scope of operation that the central collecting agency that the government intends to appoint through the tender process will not even be viable.

The government is throwing $1.5 million of taxpayers’ money at the central collecting agency under the proposed draft legislation to sustain the collecting agency in its first three years. But in its current draft it is entirely sensible and in fact reasonable to conclude that beyond that three-year period without ongoing taxpayer assistance the whole scheme could fall apart—it could come undone and be unsustainable—and then where would Australian artists be left? So Australian artists have every right to be very fearful of the major flaws in this draft bill, and again I urge this minister to take a graceful step back, to acknowledge his mistakes and to sit down and start again with respect to resale royalty rights rather than stubbornly digging his heels in, refusing to listen to anyone, refusing to admit his mistakes and pressing on with something that basically has zero support at all out there in the community.

When it comes to the central point of friction, it is to do with the retrospectivity issue and the operation of clause 11. The fundamental problem as well is that we have a minister who is unwilling to share the legal advice that the Solicitor-General’s office has provided the minister and the government about whether or not constitutionally retrospectivity can be brought into play. I know and I know the Labor member opposite, a member of the committee, knows that this committee was very frustrated at the unwillingness of the minister and the government to release this information. I again say to the minister: release the legal advice you have, because we know that there is eminent advice from other members of the legal profession which indicates that they disagree very strongly with the conclusions that this minister is forcing the committee, all members of the arts community and the opposition to accept blindly—that is, that the advice stipulates that retrospectivity would make the bill unconstitutional.

It is not good enough. Where is the notion of accountability? Where is the notion of transparency? Where is the notion of the government providing stakeholders and the opposition with the information they need to make an informed decision? It is not good enough that the minister is wanting to keep everyone like mushrooms in the dark about the most fundamental aspect of this legislation—that is, the legal advice which addresses clause 11 and the whole question of the operation of retrospectivity. It is not acceptable. It was not acceptable to the committee and it is not acceptable to me as the shadow minister. This minister is running scared and is unwilling to provide that legal advice publicly. It frustrated the committee, it frustrates me and I know it frustrates all of those stakeholders in the arts community—who, frankly, are unwilling to accept at face value the minister’s assurances that the advice from the Solicitor-General is good enough and that the advice from the Solicitor-General indicates that clause 11 and indeed the retrospectivity issue cannot be addressed in any other way.

If there was consistent legal opinion that supported that point of view, things might be different. But there is not. There is eminent advice from the legal profession, which the committee itself took evidence on, which indicates that, in the view of those legal professionals, the Solicitor-General’s advice could be wrong or at the very least certainly very debatable. In the face of this public rejection of that point, we have a minister running scared and a government unwilling to be transparent—unwilling to provide this most basic information so that stakeholders can have an informed point of view.

In conclusion, I can say that there is a rocky road ahead for the resale royalty bill based on essentially a couple of key points. The first is the unwillingness of the minister to release the legal advice. This legal advice should be released sooner rather than later—the legal advice should be released, full stop—in order to ensure that all stakeholders and I, as the shadow minister, have a chance to actually look at the contention which the minister has put forward and which he refuses to actually provide any substantive evidence of.

The other key point is that the committee has been frustrated in their investigation process. I welcome the report but I note their frustrations. It presents a rocky road for the passage of this bill because nobody is happy. Stakeholders in the debate are not happy, whether they are artists, galleries or, indeed, collectors of Australian artworks. I am not happy with the approach adopted by the government. The committee is not happy with the approach adopted by the government. It can all essentially be brought back to one key issue: the unwillingness of the minister for the environment, the member for Kingsford Smith, to acknowledge he has got this very wrong, to acknowledge that he needs to be more transparent and to acknowledge that he needs to take a backward step.

I urge the minister to take account of this very important concluding sentence that is incorporated in the committee’s report, which says ‘it has concluded that a number of matters need to be further investigated before the Bill proceeds’. The minister needs to take account of that very salient point by the committee. I welcome the committee’s report and I welcome their conclusions. I acknowledge their frustration at dealing with the minister on this issue. We have a long way to go on this issue. The minister’s timetable is already blown out of the water. The minister should accept and acknowledge that and should move forward in good faith to ensure that we can actually get a unified approach to this, instead of this basket case of a bill that is currently before the House.

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

I, too, wish to speak in respect of the report from the House of Representatives Standing Committee on Climate Change, Water, Environment and the Arts on the Resale Royalty Right for Visual Artists Bill 2008. I was a member of the committee that looked into the matters that have been reported back to this House in that report and, let me say from the outset, the introduction of this bill is long overdue. It is a bill that I commend the minister for introducing, and for doing so as quickly as he has been able to since becoming a minister of government. It is long overdue because it was back in 1977 that Australia acceded to the Berne convention. The convention was drafted in Paris in 1971, and it effectively gave protection to the literary and artistic works of artists around the world. So we have a convention being established in 1971, we have Australia agreeing to that convention in 1977 with formal entry into it in 1978, and now, 31 years later, we still have done nothing about ensuring that the rightful entitlements of artists are protected and provided to them. So I certainly congratulate the minister for getting on with what should have been done a long, long time ago.

Interestingly, already 54 countries of the 164 that signed the Berne convention have introduced a resale scheme of some kind or another. It is true that those schemes have some differences in different countries of the world; they all have peculiarities about them that make them somewhat different between one country and another. But, broadly speaking, they all set up a framework to ensure that artists get the rightful entitlements that they deserve and are entitled to. Amongst those countries, I have to say that both the UK and the European Union are signatories to it. I want to quote from the Berne convention, because I think it is important that members understand exactly what it says. The convention states:

(1)

The author, or after his death the persons or institutions authorized by national legislation, shall, with respect to original works of art and original manuscripts of writers and composers, enjoy the inalienable right to an interest in any sale of the work subsequent to the first transfer by the author of the work.

(2)

The protection provided by the preceding paragraph may be claimed in a country of the Union only if legislation in the country to which the author belongs so permits, and to the extent permitted by the country where this protection is claimed.

(3)

The procedure for collection and the amounts shall be matters for determination by national legislation.

That is what this bill does. It is Australia’s national legislation in response to the Berne convention.

Because artists have been denied their rightful entitlements for so long, there are too many artists in this country who no longer apply their artistic ability to creating artworks. A number of my acquaintances are very good artists—I have seen their work; I have got some of their work—who have not been able to continue to be artists because the remuneration simply was not there and they have had to go back to relying on other forms of income, in turn denying them the time that they need to apply themselves to creating the artwork that they are so good at doing. So I have seen it myself.

Before I came into this place, as Mayor of the City of Salisbury I would regularly host art exhibitions for young students of the schools in the area from which I came. These artworks showed an extraordinary level of talent amongst those young people; talent that I am sure could have been developed in the years ahead. But, sadly, I do not know too many of them who have continued to apply that talent. Again, I suspect because they understand that there is simply not the remuneration there as the law currently exists, they do not pursue those talents and skills. Quite frankly, because they do not, we as a society are the poorer. The resale royalty scheme provides a key incentive for those artists who do have talent to in fact continue with that work.

There have certainly been some questions raised by a number of people as a result of the bill being introduced into parliament and, because we were aware of these concerns, the committee, quite rightly, held a public hearing into the bill. If I recall correctly, we received over 40 written submissions and, on the day, we heard from around eight or nine representatives—some speaking on behalf of others. So we got a really good cross-section of all of the issues relating to the concerns with the current bill. Having listened carefully to those issues, I have to say that, by and large, the bill gets most of the issues pretty right. Yes, there could be some fine tweaking of some matters—and the nine recommendations that the committee has put forward, I believe, do that. They were not controversial matters. They were matters where, on perhaps a second look at the bill, one might say, ‘Have you allowed for this? If not, do you think it would be a good idea to amend the bill in this way?’

There is only one critical issue that is perhaps still the subject of some controversy, and that is the issue referred to by the member for Moncrieff, relating to clause 11—the issue of retrospectivity. It relates to section 51(xxxi) of the Constitution and what lawyers might describe as ‘acquisition of property on other than just terms’. It relates to the fact that, under the current bill, the resale royalty scheme cannot take effect until the second sale of the artwork. My understanding is that the legal advice in respect of whether or not clause 11 should stand in the bill is unclear in that there will be differences of opinion on it. I have listened to the advice of those people who made submissions to the committee. We also heard advice from the department. I have drawn the conclusion that that matter will only ever be properly determined in the courts.

It is my view that we need to try to ensure that the matter never gets to the courts. We should at least put together a framework that is likely to ensure that the matter never gets to the courts. I do not believe we will ever get a clear definition on whether the clause ought to remain in the bill. Because of that, the committee quite rightly recommended in its report that further advice be sought in respect of clause 11. But, as I say, it is my view that, regardless of how much advice is sought, the truth is that it will only ever be clarified once it is tested in the courts.

The other nine recommendations relate to matters which are not controversial, but they are interesting. They relate to issues such as what constitutes art and what is an art transaction—for example, if you gift art to someone, is that a transaction that should be included in this legislation? The question of internet sites which might be used to sell artwork is of some concern. There is also the question of Indigenous art, and I would have to say that the Indigenous community is probably the most deprived in terms of their rightful remuneration when it comes to artworks. There were also questions with repect to the royalty scheme and the succession that applies with that scheme. Under the current scheme, as members may or may not be aware, after the death of an artist the scheme remains in place for 70 years and it is a flat five per cent royalty. Therefore, that royalty would continue to the heirs and successors of the artist. Because of Aboriginal law, matters were raised with respect to the intestate succession in Indigenous communities. Those are, in my view, quite proper matters to be raised and they are matters that I am sure the minister will respond to. The opt-out clause, if an artist does not want to be in the scheme, was also raised, and again quite properly so. Again I expect that the minister will respond to that.

Because this is a new bill and because there are a range of issues that one can only assess after the bill has been in place for some time, the committee has recommended that the bill be reviewed in five years time. I think that is quite reasonable. We are dealing with a very complicated matter. We are dealing with a new bill and we are dealing with artists from a whole range of different areas, and so to suggest that a bill ought to be reviewed is not unreasonable. In any case, it is the prerogative of the parliament to review bills at any time, regardless of whether or not that recommendation is in the committee’s report.

The only other matter that I want to touch on is with respect to the submissions that we received. We received a lot of submissions that I believe the bill in its present form adequately caters for, and the committee did not make any recommendations on them. It was interesting to note that the art sales industry generally opposed the bill in its entirety. Again, I can understand why, but the committee certainly did not share their view in opposing the bill. The matter that I found interesting was that one of the countries has a provision whereby, if art sold goes down in value, the royalty should not apply. That is another matter that is perhaps worthy of further response by the minister. Having said that, as a member of the committee that looked into the bill in detail and listened to the submissions, I can only say that the bill in its current form—with the exception of the questions in relation to clause 11—is a bill that is worthy of being proceeded with. Certainly, as a member of the committee, I would welcome some additional legal advice with respect to clause 11. But, having said that, I am not sure that it would give me the clarification that I need. I would like to see the bill proceeded with in the parliament.

Debate (on motion by Mr Hayes) adjourned.