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The Hon Peter Garrett AM MP
Minister for Environment Protection, Heritage and the Arts

Resale Royalty Scheme; Australian art market; Cooper Review

E&OE Transcript
ABC Radio National
Interview with Paul Barclay
15 June 2010

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BARCLAY: First up tonight, welcome to our first guest, the Federal Arts Minister, Peter Garrett.

Welcome to Australia Talks.

GARRETT: Thanks very much Paul.

BARCLAY: Many commercial gallery owners and dealers are saying that the resale royalty scheme that came into force last week – this is a scheme where art works that are resold for more than $1000 will attract a royalty of 5 per cent to the artists and it applies to all living artists for a period of 70 years after their death – they’re saying that that scheme will be a catastrophe for the industry. Is that what you have been told?

GARRETT: I have heard those comments from some but not from others, Paul. And I guess I’d make a couple of points about this Paul to start the conversation.

The first is that some parts of the commercial art gallery sector have opposed this scheme, particularly the auction houses, since it was first mooted many, many years ago. Rupert Myer did a report on it, a Senate committee had a look at it, both, incidentally, recommending a resale royalty scheme. And that was opposed by some loud voices in the art sector but I found the arguments and the policy recommendations that were identified for a resale royalty scheme persuasive.

We have consulted very widely in bringing the scheme through and Labor has always had a commitment to a scheme. And this has been coming for a very, very long period of time.

And everybody and anybody who has any interest in, or connection with, the visual arts in Australia would be aware of that.

So that’s, I guess, the first thing to say. The second thing to say is the scheme has onlyjust started. In fact it commenced last Wednesday. And so for people to say it is going to be catastrophic and the world is going to end and the sky is falling in, I think are being a little premature.

Fifty countries, approximately, run schemes of this kind and I think it was long overdue for Australia’s visual artists to take an interest in the value of their work if it was subsequently resold. There is no reason why artists shouldn’t have a copyright when other performers – composers and the like – do. And we have also got strong support from sections of the industry, including some of the peak organisations that deal with Indigenous art for example, where I think the benefits in the medium and long term will be considerable.

BARCLAY: Not all people, I should add, who support Indigenous artists support this scheme. We will come to that. But regardless of the merits of the scheme, it comes at a time when the industry is struggling quite hard actually, with the economic downturn and won’t this just make art less affordable and chase away potential buyers.

GARRETT: Not at all and I find these arguments kind of perplexing and again really not taking account of what has been a significant growth in sales, particularly for Indigenous art, over the last decade or so. And no signs that in the long term, on trend, that it is going to decline.

BARCLAY: It has to make it at least 5 per cent more expensive though, just through basis mathematics?

GARRETT: It means that artists in the longer term, if their work appreciates in value and is resold, will get a proportion of that. But look at the dealers commission that goes on in galleries, look at the amount of money that is being generated through art galleries and through auction houses on Indigenous art alone.

I mean this is an industry that has got a rough estimated value of nearly $500 million now. And it is predicted to grow over the years. And the modelling that was done when we brought this scheme in showed that there would be a benefit for Indigenous artists.

Look, the introduction of a buyers premium, didn’t kill this industry, neither will a modest resale royalty for visual artists. It is high time that they got some benefit from it. And I am really saying to the industry to come on board, to work cooperatively with the Copyright Agency that is doing the collections, and to make it work because I think it is in the interests of Australian artists in the long term.

BARCLAY: I think when the previous government looked at this they concluded that it would mostly benefit late career artists, arguably those that don’t need financial assistance and it would also clearly affect and benefit the estates of deceased artists.

I think in France 70 per cent of the royalties go to estates of less than 10 very successful artists. I think in Australia we have only two of the top 20 selling artists in 2006 and 2007 who were in Indigenous. So we’re talking about the estates of Brett Whitely, John Brack, Fred Williams, Arthur Boyd and so on benefiting from this.

Will this scheme really affect and really benefit those artists who need financial assistance?

GARRETT: Yes of course it will, Paul. I mean you look at remote and regional art centres where Indigenous people are painting. Quite often these communities are full of people who are not able to generate full time employment. Many of them have got connection with welfare. Aboriginal and Torres Strait Island people are amongst the poorest people in Australia and sometimes the only income that is coming into these communities that isn’t coming by way of a government benefit or the like, is from artists.

I actually think it is an extremely positive and very, very good day for these people and I welcome the fact that for Aboriginal and Torres Strait Islander painters they will be able to think about not only the value that they will see from their own work in their lifetime, if it is sold for more than $1000 in a resale - and that is certainly is going to happen for many, many artists and you only have to go into galleries now to see that kind of work - but secondly it will provide the opportunity because it is for the lifetime of the artists plus 70 years. It is like the Berne Convention.

So they will be educated and encouraged to consider succession issues, to consider making a will, and the community will have a stream of sustainable income where they have painters who are painting successfully, from which they can derive a sustainable livelihood.

And for me that is a huge positive and that is why organisations like Desart who are one of the organisations, leading organisation in Aboriginal art centres, are very supportive of the scheme.

BARCLAY: Yes and I think many people are supportive of the intention of the scheme.

Some are suggesting thought that this scheme has unintended consequences, that galleries will stop paying up front for the works of Indigenous artists as a result of this scheme. Is that the case?

GARRETT: Artists and galleries will need to work out arrangements to maximise the benefit for artists and to make sure that the impact and the intent of the scheme is fulfilled.

And so on the question of whether purchase or taking of art work on contingency – that is something that galleries can work through.

But I guess I would make a bigger point about this. This is an industry that has been characterised, not by a majority but by a minority, who take advantage of Indigenous artists. It is an industry where we have had high levels of bootlegging. It is also an industry where we have had high levels of greatly increased value of paintings within a relatively short period of time. It is an industry where we are concerned about the ethical component of the purchasing of work, which is why we have also brought forward an Indigenous Commercial Art Code of Conduct, and we are going to be working very hard in that area.

And it is also why we have provided additional funding in the budget, the last time around, the time before this budget, but we are continuing to support it, for the Aboriginal art centres themselves.

I really find it pretty strange that people are talking about the cataclysms and the difficulties and all the problems they think are going to emerge for a scheme that has been in place for no more than four days and where I suspect there haven’t actually been any resales yet.

BARCLAY: Okay, I am talking to the Federal Minister for the Arts, Peter Garrett. You’re on Australia Talks. We’re talking about some changes to the arts in Australia. The resale royalty scheme also some possible changes to superannuation funds investing in art as well.

We will take your calls soon. The Minister is only available for a little bit longer so we will continue with our discussion with the Minister then come to your calls soon, so give us a call now and we will take your calls soon - 1300 22 55 76.

What do you think about the resale royalty scheme, do you think it will benefit Indigenous artists who in the past, we know, many of them have been ripped off and financially haven't benefited from their art? Is this a step in the right direction or not? Perhaps you own or run a gallery and have a different view.

Whatever your views give us a call now or post your views on our website abc.net.au/rn/australiatalks , especially if you’re an artist in your studio listening as I know many of you do, to this program.

Peter Garrett the art industry is also worried about something else at the moment. The Cooper Review’s proposal for a ban on self-managed superannuation funds investing in art. Do you support that proposal?

GARRETT: Look Paul, they are draft recommendations from the Cooper Review and I understand that the final report is due at around the end of the month. At that point it will be up to the Government to consider all of the recommendations in their entirety. So that is where the process sits at this point in time.

I expect to have meetings with the art sector about this issue because I know that there is a pretty high level of concern about it and I understand that high level of concern. I appreciate the way in which the mechanism up to now in terms of self-managed funds has permitted investment to take place in the art sector. I don’t want to come to a view as Minister until the final report is in and until the Government has had a chance to consider it in its entirety.

BARCLAY: So you haven’t come to a view as yet, is what you are saying?

GARRETT: No that is correct.

BARCLAY: Because the industry says an estimated $100 million a year in sales to the superannuation funds will be lost and they say for some galleries that’s up to a quarter of their total sales and could put them out of business. Do you think that is a fair point?

GARRETT: Well look, if the figures – I haven’t seen those figures in front of me – but I certainly think it’s a fair point if the figures accurately reflect a likely impost on those galleries as a consequence.

Look, the bottom line in all of this Paul, is that I am very, very committed to our artists and to our art industry. We have provided significant support. We have done a whole range of things across the Government. I am delighted that we have got a resale royalty for our visual artists, Aboriginal and non-Aboriginal artists, and I’d be looking very closely at the kind of impact that recommendations from this report may have on the industry.

I won’t come to a view at the moment, it is just not proper for me to do it because the final report hasn’t arrived and the Government has got to consider it. But I will certainly be listening carefully to what the industry says and I will be looking closely at the recommendations and also meeting with the industry as well.

BARCLAY: It has been said that the impact of possible changes to superannuation rules mean that the impact is already being felt in some galleries, that the sense is that if the rules change for superannuation investment in art, that will depress prices on art works.

There may well be a flood of art work heading out to the market because all of a sudden investors don’t see that as beneficial anymore. And that this divestiture, that’s apparently already begun could snowball. Have you heard anything about that?

GARRETT: Not in as many words I haven’t and I guess again it is a little bit similar to the discussion we were having earlier Paul, about the resale royalty scheme. I mean all we have at the moment is draft recommendations. The Government hasn’t come to a landing place, as they say nowadays, in relation to those recommendations. We’ll look at them all in their entirety.

And I guess I would take a precautionary view about being too kind of definitive about what impact it is likely to have or not have seeing as we haven’t got the final report and also the Government hasn’t responded to it.

BARCLAY: Okay, any idea when a decision will be made on that?

GARRETT: Well not especially. All I can say is that I am expecting the report around the end of the month and then it will be up to the Government to spend some time carefully considering the recommendations and I will expect to meet with the sector because one of the things that I have got a firm conviction about is that the creative output of this country is important, it sustains and employs people whether they are the creators or whether they are the retailers or the marketers. I understand that very well.

And I do know that this particular mechanism has provided a contribution. I have just seen the media reports of people talking about what it may or may not do in terms of impact. I’d like the opportunity to look at it very closely and carefully.

And you know what, we’ll consider very, very closely those views that are brought to us and we will come to a whole of Government view about the recommendations as we should.

BARCLAY: Good to talk to you today, thanks for your time.

GARRETT: Thanks Paul.

[ENDS]

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