No more struggling artists?

By mid 2010, a new royalty resale scheme will be up and running for visual artists, thanks to the passing of the Resale Royalty Right for Visual Artists Bill 2008 by the Senate in late November.  Under the scheme:

  • visual artists will be entitled to a 5% share of the resale value of their artworks;
  • the resale royalties will be collected by an organisation the government plans to select through a tender process;
  • royalties will only apply to new works created and sold for the second time after 31 July 2009;
  • the work must be sold commercially for more than $1,000; and
  • artists can accumulate royalties up to 70 years after their deaths.

In practice this means that if an artist sells his/her work through an art dealer, they will not receive anything of the sale price (unless otherwise agreed).  However, if the work is sold later on for $1,000 or more, the artist will receive 5% of the sale price.
The scheme has been highly anticipated by the artist community. The scheme will be particularly valuable for artists (and their heirs or beneficiaries) who produce work that increases in value over time.
However, the scheme has also been widely criticised. There have been concerns that the scheme will potentially make many artists wait decades for a second resale before they see a cent for their work which has been resold already. If there is a substantial period between the first and second sale of the artistic work, it is possible that only the heirs of the artist (or beneficiaries of a will prepared by the artist) would benefit from the scheme.  In addition, in some circumstances, the first sale is much more valuable than the resale.
Other countries have also adopted a similar scheme or are in the process of adopting one (including the UK, Ireland and NZ).  Once established here, Australian artists will be able to benefit from reciprocal arrangements with other countries where resale rights also exist (for example, if their work is sold in another country).   

It will be interesting how this scheme will work in practice and whether artists will truly benefit from it in a way that is intended by the Government. 
No doubt, there will be some significant administrative costs for art dealers, auction houses and trustees (such as Public Trustees that administer the estate of the deceased). The main administrative challenge would be tracking every distinctive artistic work.  Will they put barcodes on each work? 
One also wonders whether it will affect the quantity and quality of Australian art – will artists have an extra incentive to release as much art as possible to ensure they receive as many  royalties as possible? Or will there be no effect because art has always been commercialised?

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