The art of money: resale royalties feed struggling artists or 'rich widows'?

It’s hard to move beyond the cliches about poor, morally superior artists struggling against the rich and powerful who exploit and profit from their talents.

The recent Biennale of Sydney artists versus Transfield ideological stoush was largely cast as a good (artists) versus evil (corporate) scenario despite the complexities and contradictions involved in (some) of the artists protesting against Transfield’s involvement in offshore detention camps. And today comes a protest exhibition in Sydney organised by 100 artists in opposition to Senator George Brandis flagging the federal government might scrap the 5% resale royalty scheme introduced by the former government in 2010.

Tamara Winikoff, who runs the artist lobby group the National Association of Visual Arts, said in a press release for the show at Boomalli Gallery in Leichhardt:

“While an enormous number of artists support the scheme, they have been the silent majority in the debate which has been dominated by powerful gallery owners and auction houses who begrudge sharing a small proportion (5%) of the profits with artists and are opposed to the requirement for greater accountability in their dealings.”

She tells Daily Review that auction houses “have no real commitment to artists themselves. They are interested in objects and their own profits.”

Brandis’ involvement adds a certain spice to this story. His recent anti-artist stand in the Transfield saga has cast him as one of the hooded-eyed, nasty guys in the ongoing battle between artists and the rest of the world.

But stories are never quite as black and white as they seem. Last year’s review of the scheme was scheduled by the previous government — not under Brandis’ watch — though its fate now is largely in his hands.

The resale royalty — or droit de suite — scheme was introduced after a long and painful gestation. Not only did it bring Australia into line with artist rights long accepted in other countries, it would also address the shocking situation of Aboriginal artists who have long been exploited by dealers who bought their work cheaply, then sold and resold it without the artist seeing a cent of the increased value.

Artists can opt in or out of the scheme. If they opt in, they can claim 5% of the sale price when an eligible artwork is resold commercially for $1000 or more. The right endures for 70 years after the artist’s death. NAVA argues this gives artists parity with writers and composers, who are paid when their work is reproduced.

But the scheme requires the seller to report all commercial resales for $1000 or more, whether or not a royalty is payable.

Some dealers and the auction houses have loudly complained that the scheme has driven business down, is costly to administer and hasn’t helped struggling artists at all. One colourful dealer called the royalty “yet another form of passive welfare. None of this money will ever go into community development or address indigenous disadvantage.”

Another dealer spoke to Daily Review on grounds of anonymity because he didn’t want to enter into the “poor artists versus greedy art traders” debate. He’s supportive of artists’ rights, acknowledging the large majority struggle to achieve even a low income — but he reckons the resale royalty scheme delivers few benefits to them.

“It has created a gloomy atmosphere in the art world: over the past 15 years we have seen the resale royalty copyright payments for catalogues (one of our largest expenses); restrictions on buying by super funds; and (very importantly) restrictions on exports of indigenous art produced for the commercial market,” he said. “These four components have been a disaster for the art trade and the effects are now impacting primary galleries and their artists.”

The dealers’ other major argument is that the scheme has mostly benefited “the widows” of our most valued artists whose husbands’ major work can sell at auction for over $1 million. “A vastly disproportionate amount of the money collected goes to a few already prosperous artists or their estates: Whiteley, Williams, Nolan, Blackman, Boyd, Brack, Olsen, Drysdale. The rich get richer,” said the dealer.

One of “the widows” tells Daily Review she hasn’t commented on the resale royalty scheme for fear of appearing self-interested. “I have the option of taking it or not, and I can see both sides of the argument [for its retention or removal].” she said.

“When I look at some of the prices for the works, I laugh. I see the price for [works] from the 1970s selling for $200 or $400, and now you see them selling for $80,000,” she said.

She says her guide to opting in was usually based on whether the work was being turned over quickly for speculative profit: “If someone is selling the picture and it’s only for a couple of thousand more, then I won’t take it [the royalty] because if someone is selling it then they clearly need to sell it.”

The argument that Aboriginal artists are not benefiting from the scheme is not borne out in the statistics of the Copyright Agency that administers the scheme. Since the scheme began in June 2010 until February this year it had generated royalties of more than $2.28 million in 8000 re-sales for 820 artists, with the lowest royalty being $50 and the highest $55,000. Most royalties are between $50 and $500; more than 65% of the artists receiving royalties are Aboriginal or Torres Strait Islander. Of the 50 artists who have received most money under the scheme, 26 are Aboriginal or Torres Strait Islander, the agency says.

One of the artists exhibiting work at Boomalli from today is Melbourne painter Juan Ford (pictured, his You, Me and the flock). He says he’s only received the royalty once — $900 — and was grateful for that.

“When work is speculated on it’s good to know that you can reap a little bit from that speculation over which you have no control,” Ford told Daily Review. “This imposes some transparency on the market and the auction houses like it to be opaque.”

The Copyright Agency says the scheme has generated more than the $1.5 million it cost to fund it for three years. Winikoff argues it’s very early days in its life because a work has to have been sold twice since 2010 to be eligible for the royalty. She says it’s also addressing the issue of self-employed artists being able to make a living from a variety of sources, including sales of new work, copyright reproduction rights and the resale royalty.

Brandis’ pending decision is being closely watched. Will he cast himself as the good guy and come down on the side of struggling, if not impoverished, artists? Or will he favour the business people who run the art market?

8 responses to “The art of money: resale royalties feed struggling artists or 'rich widows'?

  1. Working in the Aboriginal Art industry, I can say that the artists are getting blatantly exploited. All this has done is make more sales that are $990.00

  2. For the sake of emerging artists, abolished this royalties. What is the point of royalties if you cannot sell or if the market is down. Remove all red tapes and thjs passive welfare, and assist artists in other ways. Not all artists supports this red tape, unpractical and costly scheme. Do not waste taxpayers money.

  3. Raymond
    the scheme has cost a total of $2.2 million, not $1.5 million, $1.5 million was the initial allocation, an additional $700,000 was added in the 2012 budget , and I have not included all the art projects funds that have been wasted over the years on lobbying for ARR.

  4. Raymond
    The Resale Royalty is, anti-progressive and a awful waste of the limited public budget for art projects. Please have a read of this article by us:

    The calculations and pie chart as to who really gets most of the money -which they do involve a small degree of extrapolation( the official data is very incomplete )- were done for us by a leading centrist/progressive economist.

  5. Well the National Gallery of Australia happily purchased a totally remade work by me, illegally remade by my art dealers at the time, one of whom is still an art dealer. I was not told of this purchase until the Royal Academy, London requested copyright. The NGA hadn’t bothered even though they are legally obliged to. I received no resale royalty from the sale of course. The NGA never even bothered to mention that. This was the ONLY work the NGA had ever attempted to buy of mine after 30 years! The work now sits in some limbo in Canberra as Ron Radford just gave up dealing with me because I “went public” with the affair, the NGA words to me.

    So basically we have to say that it’s not only the evil dealers artists have to worry about, they are often struggling to survive let’s face it. Although I can share ‘evil dealer’ stories if you want, I have many. The real evil people are the NGA and all those government art public servants who act in just as bad a manner. A time bomb is sitting in the government art institutions of Australia, most have no signed copyright contracts for all the Australian art they own and reproduce in catalogues and online! Someone should,look into this! The entire government art world is run on ripping off Australian artists, this is why we are all so poor. Brandis would care, he’ll side with the $$$$

  6. Quote: “NAVA argues this gives artists parity with writers and composers, who are paid when their work is reproduced.”

    There is a big difference between reproduction and resale. Artists can reproduce and sell their art works as prints if they choose, as a method of monetising.

    Under this scheme do Australian authors receive this royalty if, say, a first edition book is resold in excess of $1000.00?

    1. Yes there is a big difference, any author whose first edition would sell for more than $1000.00 would have made a commission on every book sold, as per their business model. And for a first edition to sell for a $1000 then they would have sold many tens of thousands of books. In painting the value is in the original work and it would be unlikely that an unknown artist whose original work sells for $1000.00 has any scope for selling large volumes of prints, or that they would have the resources to engage in such a model. Composers and music artists also receive a fee each time their song is played on radio, I am yet to hear of a visual artist who gets a cut each time their work is viewed at a gallery.

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