Australia Announces Resale Royalty Plan

The Australian government will introduce resale royalty rights, or droit de suite, literally “right to follow,” next year that provide visual artists or their estate up to five percent of the sale price each time their works are resold. The law will cover artworks by living artists sold for more than AUD 1,000 (USD 775) in Australia and all artworks for 70 years after the artist’s death.

The Australian copyright-collection agency Viscopy is the leading contender to administer the scheme and has already recruited Joanna Cave as its chief executive. Cave, who heads the Design and Artist Copyright Society (DACS) and is a trustee at BALTIC Centre for Contemporary Art, has successfully and aggressively led the UK’s version of resale royalty for several years. Viscopy, which takes an approximately 25 percent cut of the revenue it receives, has more than 5,000 members, almost half are Indigenous artists, whose works, historically, were often brought for low prices and sold later for high prices at auction.

The program will go into effect on July 1, 2009. The Rudd government has established an AUD 1.5 million (USD 1.15 million) fund to bankroll the initial cost of the program. Though details have not yet been released, Peter Garrett, minister for the arts and the former frontman for the rock band Midnight Oil, has called in Cave for advice while finalizing the legislation.

Supporters claim that the law is particularly important to Indigenous artists who once sold their works for rock-bottom prices but recently have seen their works sold at auctions for five- and six-figure sums.

Opposition to the scheme is loud with many opponents claiming that such a levy will dampen the overall art market, which critics maintain is the crucial support mechanism for all Australian artists. Michael Keighery, chair of Viscopy, claims that there is no evidence of any diminishing effect where similar schemes operate overseas. The agency has closely monitored the UK experience since it was introduced in 2006.

Managing director of Sotheby’s Australia, Lesley Always, questions the plan’s ability to deliver intended benefits to both Indigenous and non-Indigenous artists. “We question the effectiveness of a visual art resale royalty to deliver intended benefits. Other jurisdictions that have implemented visual arts resale royalty schemes demonstrate the greatest benefit goes to the most successful artists, rather than those who most need some income support,” she said.

Resale royalty has long been supported by the Australian Labour Party, which came to power last year and is committed to fast-tracking the legislation. “A resale royalty scheme will provide further recognition of the critical contribution artists make to our identity, community and economy. The scheme will provide artists with proper recognition of their ongoing rights over their work and will provide a potential additional source of income,” Garrett commented.

Objections were raised in the press after details of the current legislation were revealed on October 1. To protect those who purchased artworks before the legislation, artists will receive payment for works previous sold on the secondary market only after a second resale occurs. In addition, critics and supporters alike speculated that galleries and auction houses will try to exploit this loophole by back-dating sales that occur after July 1, 2009.  

Keighery believes that the introduction of resale royalties will add an additional level of scrutiny to the auction market. “There are a lot of practices that go on at auction houses that auctioners would prefer not to be scrutinized. Resale royalty will introduce a layer of transparency,” he added. The royalty plan will require more scrupulous monitoring of sales by both government agencies and Viscopy.

Like many living artists in the current contemporary art boom, Australian video artist Shaun Gladwell has personal experience with the inequity of the current system. Gladwell’s video Storm Sequence (2000), shot at Bondi Beach, first sold through Sherman Galleries for AUD 3,000 (USD 2,100) in 2003. Chosen by Robert Storr for the Italian Pavilion at the 2007 Venice Biennale, the work reached the secondary market in 2007, where it sold for AUD 84,000 ($59,000), a record for an Australian video work. Under the proposed royalty scheme, Gladwell would have received approxmiately AUD 4,200 ($3,000). While remaining nervous that resale royalty might slow the market, Gladwell supports the notion that the scheme will acknowledge the artist’s contribution. “From an artist’s perspective I’m all for it,” he said.

Australia joins Britain and New Zealand as countries that have recently adopted royalty payment schemes. New Zealand commenced its revenue-sharing program in May and there are numerous similarities between the two countries’ plans.