Judi Moylan (Pearce, Liberal Party) Share this | Link to this | Hansard source

Once again, I appreciate the opportunity to complete the contribution to this debate, which was adjourned yesterday. Indeed, I have waited several months to speak on the Resale Royalty Right for Visual Artists Bill 2008. As I was saying yesterday, before the debate adjourned, the bulk of the concerns about this bill rest with the requirement that the royalty right is only attached to works acquired after this bill comes into effect. An artist will only receive royalties on an existing piece of work when it is resold for a second time after the scheme is up and running. In an article in the Australian the Minister for the Environment, Heritage and the Arts argued:

… “Haven’t Australia’s visual artists, including our significant indigenous artists, waited long enough?”

It is lucky that visual artists have well-developed patience because it seems as though they still have a bit of waiting to do. Not only has this bill been repeatedly delayed by the government; it is also fundamentally drafted to keep artists waiting for some time after the scheme is eventually implemented. The royalty right, as designed by the bill, means that an artwork acquired before the operation of this bill must be resold twice before a royalty can be generated. The minister described this requirement as important to ensure that purchasers of artwork are aware at the time they make their purchase that a royalty may be payable to the artist if they chose to resell the work. I understand that there has also been some concern as to the constitutionality of the scheme where a royalty is paid for every resale of artwork, regardless of when it was acquired. I note that the report of the House of Representatives Standing Committee on Climate Change, Water, Environment and the Arts recommended that further legal advice should be sought to clarify the position. The Coalition for an Australian Resale Royalty noted:

In all other countries where the right has been introduced, the royalty is payable on resales, after commencement, of works acquired before commencement as well as after commencement.

This is an issue that will have a real impact on artists. According to research undertaken by the Coalition for an Australian Resale Royalty and Viscopy of artwork sold at auction, it generally takes longer than 10 years to transfer the ownership on the secondary art market. Viscopy said:

If we take a very conservative estimate of an average of 20 years between sales then it is likely that a work first sold in 2008 will not resell through an art market professional until 2028. Under the proposed scheme the artist will receive no royalty for that sale as the work was acquired before the legislation comes into effect. It is not until the work is resold again in another 20 years … that the artist receives resale royalty income …

as Viscopy went on:

40 years after the legislation comes into effect.

It would seem as though the government have found themselves in a tricky position, having campaigned before the 2007 election promising to introduce a resale royalty scheme for visual artists and yet artists who have been asking for this for 20 years will now probably have to wait 40 years more to see those royalties. The Chief Executive Officer of Viscopy, Joanna Cave, recently noted:

As the bill is drafted it is fatally flawed. And the risk is that it will deliver bureaucracy and no money whatsoever. So, there’ll be a lose lose situation.

Following the publication of the committee report the National Association for the Visual Arts, one of the most vocal advocates of a resale royalty right scheme, commented:

For the Government to truly fulfil its election promise, it must deliver a robust and fully functional scheme so that artists are eligible to gain an immediate income stream. As things stand, Clauses 11 and 23 are a real impediment to Australian artists benefiting as they deserve.

I can certainly appreciate these concerns and feel that the government owe it to those artists to whom they promised a resale royalty to ensure that this system works as effectively and efficiently as possible. While the government agreed in May to implement a review of the operation of the scheme five years after it had been implemented, it is clear that much more could be done.

Sadly, as with most things that we discuss these days, the art market is not exempt from the consequences of our current financial conditions. Within the media there have been several calls for the measure to be delayed or abandoned for fears that the scheme will negatively impact the already fragile art market. I cannot say that I agree with that perspective but, in any event, commercial art dealers in particular are worried that this scheme will further flatten the market. The government has, at least, an obligation to this group to monitor the success of the scheme and to work constructively with all interested parties to ensure that the range of interests are addressed.

Throughout the plethora of commentary on the bill, there is a common acceptance that this scheme will have a particularly beneficial effect for Indigenous artists. In an article in the Indigenous Law Bulletin entitled ‘Australian visual artists: joining the resale rights arena’ it was said that there had been ‘numerous examples of dramatic disparity between original and secondary sale prices of Indigenous artworks’. I suppose one of the most alarming examples of this, or one of the most graphic examples at least, was when a painting by Clifford Possum Japaltjarri was sold in 2007 at Sotheby’s auction for $2.4 million, yet in 1977 it had been bought for just $1,200.

This legislation will ensure that artists and their heirs will get a share of the money that is generated by their artworks eventually. For the Indigenous art community, this means that they will no longer miss out on the success that their work enjoys—a development that I am sure will be most welcome. The royalties will contribute a new income stream into remote communities and will help to ensure that the ancestral link of artwork is maintained, with new artists receiving the encouragement and support that they need. There is no doubt that there are still a number of significant concerns among the wider community and within the arts community specifically over this legislation. These are concerns that I think the government does need to engage with and perhaps may in time be well disposed to address.

Despite these flaws, it is imperative that Australia’s visual artists have their rights to resale royalty recognised in legislation. When we look around at the community halls-cum-gallery walls of local art exhibitions, as I do frequently, or the high-end auction houses selling famous works, which I definitely do not do very frequently if at all, it is important that we know that the skills and passions of these fine artists are being rewarded. For the visual artists, it is important that they know that not only their work but also the contribution that they make to society is recognised and cherished and valued in a very real way.

Whether your favourite art is a Tom Roberts or an Ian Fairweather painting or a Robert Klippel sculpture, art does enrich and enliven not only us as individuals but also our communities. I am pleased to say that in the Pearce electorate we see art being used in the landscape, and I think that is a welcome development. I note that that is the case here in Canberra, too, and I think it adds a dimension to a city that perhaps is difficult to otherwise achieve. I certainly appreciate those developers who give consideration to incorporating art into the landscape.

I have a relatively new housing subdivision in my electorate called Ellenbrook. The developers had the vision early on to incorporate art into the landscape, featuring sculpture and artwork that showed a great sensitivity and appreciation for the local flora and fauna, for the local environment and of local products, all created by local artist Philippa O’Brien. It is a joy to visit that community. Here you have a vast housing estate, a lot of closely linked houses, and yet you can go to the public spaces within that estate and enjoy the art in the landscape. I think it adds a dimension to that community that otherwise would not be there. I commend those who develop both our urban landscapes and our cityscapes for the thoughtfulness they put into it, where they do incorporate art into the landscape. I chaired the Public Works Committee for nine years in this place, and there were several occasions when I encouraged developers developing government buildings to also incorporate art into the landscape and into the building design.

The private and public spaces in this parliament are enhanced by an eclectic and vast collection of artwork. I very much appreciate the people in this place who take the time to select the artworks that we all benefit from. I know there has sometimes been controversy over the kinds of works that are incorporated into that collection. Nevertheless, many of us are grateful for that collection in the conflicted and sometimes bruising work of this place, because we can go and pause and ponder the powerful distraction that fine visual art provides. It really should serve to redouble our political will and our efforts in this place to make sure that artists are indeed fairly rewarded for the work that they do. While this bill takes a step in the right direction, there are issues and matters in it that we probably could improve with a little more thought and perhaps a little more consultation with the various sections of the art community.

I have been waiting to speak on this bill since last year. It has been put off and put off. I feel very strongly that art plays a very important part in the community. It can enhance your appreciation of the natural beauty around you. Artists have the capacity to cause us to consider the past and to look into the future. Sometimes art can challenge our perceptions of how things are, and that is not a bad thing. Sometimes we need to be challenged. I think art has the great capacity to cause us to challenge our perception, to look on things a little differently and to consider things from a different perspective. As I said, whatever your favourite piece of artwork, anybody who loves and appreciates art as I do will agree that it definitely enlivens and enriches all our lives.

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

I speak in support of the Resale Royalty Right for Visual Artists Bill 2008. Unlike most coalition members opposite and particularly the member for Moncrieff, who gave such a pretentious performance on 19 March this year, the Rudd government and, in particular, the Minister for the Environment, Heritage and the Arts are prepared to stand up for and to support the rights of Australia’s 20,000 visual artists. Over almost 12 years in office, coalition members gave lip-service to the arts community but delivered nothing.

I listened to the comments of the member for Pearce a moment ago and I accept her sincerity in wanting to support artists in this country. But the fact of the matter is that for 12 years coalition members had the opportunity to do so—and I will come to that in some detail in just a moment—but did not. I also accept her comments about the fact that this bill will mean that it will be 20 years before some artists gain any benefit. Again, I believe that is possibly the case. However, had we started 12 years ago with this kind of legislation, we would now be 12 years into the 20 years that the member for Pearce referred to. It is my view that the sooner we get legislation into place the sooner artists will be able to benefit from it.

The new-found empathy of some opposition members for Australia’s visual artists can only be described as sheer hypocrisy and desperate political opportunism when one actually looks at the track record of coalition members when they were in government. On this issue, the facts not only speak for themselves but certainly tell a different story to what the member for Moncrieff would have had us believe when he was speaking on 19 March in the House.

Let me refer to some of those facts. In March 2004 Labor Senator Kate Lundy introduced a private member’s bill simply because coalition members would not act on this issue. The bill was unsuccessful and was clearly not supported by the coalition members at the time. And so, not only did the coalition members not make the move themselves to introduce the legislation but when it was introduced by Senator Kate Lundy, they did not support it. They voted against it. It is one thing to come into the chamber now and pretend that you are the friend of Australia’s artists, but it is another thing—when your vote counts—to actually not support it.

I give another example. In May 2006, after sitting for four years on the 2002 Contemporary Visual Arts and Crafts Inquiry report, the coalition government decided against the introduction of resale royalties, which they said, ‘would adversely affect commercial galleries, art dealers, auction houses and investors’. The member for Moncrieff—who is the opposition spokesman on this matter and who I referred to as having made a dramatic speech in the House on 19 March—was a member of the House at the time. Where was he in standing up for the rights of artists in 2006?

It is clear that on this issue of resale royalties coalition members are on the side of auction houses, commercial galleries, art dealers and investors, and not on the side of Australia’s visual artists. They had the opportunity to support Australia’s visual artists when they were in government and they failed to do so. The coalition’s view is: let others profit from the work of artists, but not the artists themselves.

The other point I make about the response to this bill by the member for Moncrieff is that for all his criticism of the bill—and he had a lot to say and made much criticism of it—not once did he make a suggestion about how it might be improved and not once did he put forward any amendments to the bill. He simply attacked the government on it. Why? Because when it comes to form on this issue, the opposition has form in not supporting a resale royalty scheme for artists within this country.

The Rudd government and the Minister for the Environment, Heritage and the Arts, Mr Garrett, made an election commitment to bring in a resale royalty scheme for Australia’s visual artists in the 2007 election—and the minister for the arts is getting on with delivering on that promise. This bill flows from the Berne Convention of 1971. The bill is intended to give effect to article 14 of the Berne Convention for the protection of literary and artistic works. I want to quote part of article 14 of the Berne Convention:

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.

There are two other parts but that is the critical part that I want to quote. Australia acceded to the Berne Convention on 28 November 1977. That is some 32 years ago and we still have not acted to implement that section of the Berne Convention. To date, 54 countries out of 164 contracting parties to the Berne Convention have introduced a resale royalty right, including the UK and other European Union members. While those schemes vary between nations—in the rate of royalty paid, the minimum threshold level, how the schemes are administered and other administrative matters—the schemes all uphold the principle that artists should retain an interest in future sales of their work.

In short, under the scheme, a five per cent royalty will be paid to artists, commencing with and from the second sale after the scheme comes into effect. The five per cent royalty payment applies to art work resold for $1,000 or more. The royalty remains in place and continues to apply for 70 years after the death of the artist, with all royalties then paid to the beneficiaries of the artist’s estate. All royalty payments will be collected and distributed by a central administrative agency.

Importantly, under the Berne convention of 1971, reciprocal rights must exist in Australia for overseas artists if Australian artists are to receive royalties from sales in overseas countries. That is one of the critical things about this bill, because some of the works of our own artists are sold offshore and then resold. We cannot enjoy those reciprocal rights unless we have our own legislation in place—so the artists clearly miss out.

This legislation was referred to the House Standing Committee on Climate Change, Water, Environment and the Arts on 28 November 2008. The primary purpose for referring the bill to the committee was the that resale royalty payments would not commence until the second sale. The committee subsequently received and considered some 40 submissions. A public hearing, which I attended, was held on 6 February 2009, where evidence from 20 witnesses was presented. The committee reported back in February 2009 with 10 recommendations. I believe that all but one of those recommendations are non-contentious and quite properly respond to matters raised during the course of the inquiry.

The one matter that is a deal of concern to artists is the matter relating to the commencement of the proposed scheme. Under this legislation, royalty payments to artists commence after the secondary resale or transfer of ownership of the artworks. In other words, the scheme will not be retrospective. The particular issue in question is clause 11 of the bill, having regard for section 51(xxxi) of the Constitution, which deals with the question of acquisition of property on the other than just terms. If I can just quote that section of the bill:

If an artwork exists on the commencement of this Part, there is no resale royalty right on the first transfer of ownership of the artwork on or after commencement, even if the transfer of ownership is under a commercial resale.

I am aware that there have been opposing legal views on this matter. I have read some of those legal views. I am not a lawyer, but I certainly accept that there is a difference of opinion about the interpretation of section 51 of the Constitution and whether section 11 of the bill contravenes section 51 of the Constitution. It is true that the committee sought further legal advice in respect to that. But, having sought further advice, it is also true that the committee did not oppose the bill; it simply sought further advice. At no point within the recommendations of the committee did the committee oppose the bill because we did not have that advice or because we did not accept that that may well be a concern that needed to be dealt with. We heard from the minister’s department in respect of the concerns about clause 11.

The point I emphasise here is that, whilst it was accepted and acknowledged that section 11 was a contentious matter, it nevertheless did not cause the committee to come to the conclusion that the bill should be opposed in its present form because of section 11. What I can say, however, is that as a result of the inquiry that was conducted by the standing committee there is widespread support for the bill and that the bill does take into account the interests of a very wide cross-section of artists. The bill has been carefully worked through to ensure that it is as fair and equitable as possible. It is my view, having listened to the submissions, that the bill does do that, and with the amendments that have been proposed by the committee—which I understand the minister is looking at—I believe that the bill accommodates pretty much all of the issues that ought to be accommodated as a result of the public inquiry that we went through.

Artists have been calling for over 25 years for a resale royalty scheme in Australia. I know that part of the reason why a resale royalty scheme was not introduced was the concern expressed by gallery owners, auction houses and art dealers that a resale royalty would add to the cost of the artwork and therefore dampen sales. There is no evidence whatsoever that that would happen. If you look at what happened when the 10 per cent GST was introduced or if you look at the buyer’s premium of anywhere between eight and 20 per cent that is included on artwork, it is difficult to accept the proposition that the five per cent will dampen sales, because neither the GST nor the eight to 20 per cent charged by gallery owners, auction houses and art dealers has done that. In fact, my understanding is that, since the GST came into effect, the opposite has occurred—art sales have actually increased.

The beneficiaries of this bill are the artists, and so they should be; it is their work that creates the value. I hope that the introduction of this bill will not only encourage artists with potential to continue with their artwork but also enable some of the good artists of this country to continue with their artwork where they have been unable to do so because they cannot generate enough income. We certainly have some very, very talented artists in this country.

I will close with a brief reference to the aspects of this bill that deal with Indigenous art. One of the main groups that will benefit from this bill is our Indigenous artists. In 2007, Indigenous artists sold something like 1,578 artworks, to the value of $175 million. Indigenous artists tend to sell their work at the lower end of the market, and ultimately their works may go up enormously in value. The member for Pearce referred to Clifford Possum Tjapaltjarri’s painting Warlugulong, which sold in 1977 for $1,200 and was sold for $2.4 million at Sotheby’s in 2007. Again, who benefited from that? Certainly not the artist involved.

There are a number of other recommendations in the bill which I will not go through in detail, but I will say this: the other issues that were raised relating to the needs of and support measures for Indigenous artists were, I believe, recognised in the recommendations of the House of Representatives Standing Committee on Climate Change, Water, Environment and the Arts. I believe that those needs are real and I believe that the minister is looking at the recommendations of the committee to see what can be done to ensure that those recommendations are adopted. I welcome the recommendation also that this proposal be reviewed in three to five years.

The truth of the matter is this: the sooner we can get this bill through parliament, the sooner artists will be able to earn some additional revenue from the resale royalty. Every day we delay is delaying their ability to do so. Even with the concerns relayed to us in respect of clause 11, it is my view that it is better to get the existing bill through the system and to have it in place so that the time starts ticking away in which artists can start to get a benefit from it. For that reason, I hope that the bill will be supported by the coalition and supported by the members of the Senate. I commend the bill to the House.

Mal Washer (Moore, Liberal Party) Share this | Link to this | Hansard source

The purpose of the Resale Royalty Right for Visual Artists Bill 2008 is to create a resale royalty right scheme for visual artists. The resale royalty right will be inalienable and endure for the life of the artist plus 70 years. A resale royalty right is the right of an artist to claim a percentage of the proceeds of each successive resale of their original work. It is often referred to as ‘droit de suite’, meaning right of follow-up. This bill will entitle artists to a royalty payment of five per cent on the sale price of any commercial resale of the artist’s original works of art over $1,000. The right is a means of countering discrimination against artists in the copyright system.

Artists, as copyright owners, are entitled to receive payment for reproduction of their works, as authors receive royalties for books sold and composers receive payments for a record sold. However, for many visual artists the principle purpose of their work is the original rather than the reproductions of it. Therefore, this enables them to share in another’s profit from the resale of their original.

The bill intends to give effect to article 14ter of the Berne Convention for the Protection of Literary and Artistic Works. Australia acceded to the Berne Convention on 28 November 1977, with entry into force on 1 March 1978. Fifty-four countries out of 164 contracting parties to the Berne Convention have introduced a resale royalty right, including the UK and other European Union members. This bill is supportive of our international treaty obligations and would assist artists in recovering resale royalties from overseas. This bill was referred to the Standing Committee on Climate Change, Water, Environment and the Arts for consideration. The committee, of which I am deputy chair, found widespread support for a resale royalty scheme for visual artists.

Out of the numerous issues that were raised in the inquiry, two key issues were thought to be critical to the success of the scheme. The first was whether existing artworks should be included in the scheme from the outset. Currently clause 11 excludes the first resale of existing artwork from the date of introduction of the scheme. The explanatory memorandum states:

The prospective application of the right will help protect the property rights of people who bought artwork not knowing that a resale royalty would be payable when they resold them.

In all other countries where similar schemes have been introduced, the royalties have been payable on all resales from the date of commencement. The problem with excluding the first resale of existing art work is the indication that turnover of artwork is around 20 years. This would mean minimal benefits to most artists. The Department of Environment, Water, Heritage and the Arts submitted that exclusion was not their original intention but was based upon potential constitutional issues. Section 51(31) of the Constitution states:

The Parliament shall, subject to this Constitution, have power to make laws for the peace, order and good government of the Commonwealth in respect to: the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has the power to make laws.

The issue is whether the proposed scheme involves an acquisition of property on just terms. Advice by Mr Robertson SC and evidence provided by Mr Dearn and Dr Rimmer drew the committee’s attention to the 2009 High Court rulings in relation to events that may or may not involve acquisition of property on other than just terms. Given the significance of these rulings, and the impact of clause 11 on the scheme and the benefits to artists, the committee recommended that the minister seek further legal advice on whether omitting the clause would make the scheme unconstitutional. The committee also asked legal advice be sought on the possibility of amending clause 20 to exclude sellers from those persons who are jointly and severally liable to pay the royalty on a commercial resale of an artwork. If this was acceptable then it may have removed the necessity to include clause 11.

The government responded to this recommendation by seeking further legal advice and is of the opinion that the removal of clause 11 and the amendment of clause 20 would expose the Commonwealth to significant risk. Therefore, although clause 11 may have had a negative impact on the benefits to artists, it would appear to be constitutionally a legal necessity for the operation of the scheme.

The second key issue raised by the committee was whether individual artists should be able to opt out completely and personally have the right to collect royalty. Clause 33 states the resale royalty right is absolutely inalienable. This is in line with article 14ter of the Berne Convention. Clause 15 does allow for artists to transfer this right to a charitable institution that works for the benefit of the community. The intention is not to create a right that is tradeable as a commodity or to be held as a commercial entity but one that can be passed to natural heirs and not-for-profit organisations. Clause 33 provides a safeguard for artists being pressured into giving up their rights to obtain a royalty for the resale of their art work. However, clause 23 states that artists can exercise their right to say no to the collecting society to collect the royalty—(Time expired)