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

Australia's resale royalty right

Ministerial Statement
Canberra
21 October 2008

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Mr Speaker, 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 ('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 which found, despite being highly trained, visual artists to be among the most poorly remunerated of all artists.

And 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's not until now that the government of the day has committed to introducing standalone legislation to implement such a scheme.

It's taken a while, but we got there in the end.

This Government is proud of its efforts to put the arts centre stage.

We have never shied away from openly advocating the critical role of the arts and artists in our society and 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 boosting and enhancing this country's cultural life.

In fact the only dissenting voice came from the former Treasurer, the Member for Higgins.

Mr Speaker, 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 % 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 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 we've 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 artist 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's important to note that the scheme we will introduce has been informed by a series of discussions and consultations with the sector which included artists, art market professionals and the auction houses.

It's 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.

And 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 5 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 5 per cent flat rate will make the scheme easy to understand.

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 and 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 the 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 - and 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 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, while on the other, 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.

Mr Speaker, 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, diverse and 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 previous attendance record which was 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 arts practice 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 is finalised as a priority.

Additionally and critically, there will be regulatory benefits for Indigenous artists through improved transparency and record keeping in the art market.

This will result in greater tracking of sales on the secondary market.

Poor - or 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's say in July 2009, after the 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 an 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 paint-brush, clay, glasswork or photographic negative - often time 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.

Commonwealth of Australia