PERSONAL VIEW: Jolyon Warwick James, President of the Australian Antique and Art Dealers’ Association (AAADA, NSW Chapter) and chairman of the Australian Antiques and Art Market Federation (AAAMF), examines the problems with the Artist’s Resale Right in Australia.
Pablo Picasso (1881-1973) is credited with
saying: "Good artists copy, great artists steal." We can assume he
was referring to what people do on canvas, in metalwork, with dead
sharks, and used underwear etc. But would he have been aware how
applicable his words might be, not just to artists, but to
politicians as "art sale regulators"?
Are Australian politicians, in this regard,
good or great? Did they copy or steal Artist's Resale Right (ARR) -
a term most find easier to pronounce than 'droit de suite'. Is the
Australian model of ARR effective or not?
Given that the Australian government has
already embraced ARR - it has been in place since 2010 - let us
look at how successfully it has been adapted to local
circumstances. These certainly differ from those in Europe, in
particular Britain, in a number of ways. Firstly, artworks do not
reach the intergalactic price levels found in Europe, the US and,
Secondly, Australia is not competing with
other centres as a world clearing house for works of art. Thirdly,
ARR was introduced largely on the back of the belief that
indigenous artists did not receive a fair share of the benefits of
the work they created, and more generally that many artists, often
described as "struggling" to make a living, were inadequately
The rewards (profits) accruing to the art
dealers, traders and auction houses were often touted as
disproportionate to the returns made by the creator of the
Comparison with UK
In a couple of ways, the rules governing ARR
in Australia match those in the UK: it is paid to living artists
and to the heirs up to 70 years after an artist's death. It is only
levied from the second sale. It is not charged on the first
transaction which takes the work out of the hands of the
In the UK, ARR applies to immediate
resales of €10,000 and over, but there is a three-year grace period
to qualifying works whose first resale is over €1000 but under
€10,000. The UK cap for ARR is set at €12,500 and there is a
sliding scale of rates: 4% on works up to €50,000, 3% from there up
to €200,000 and so on.
In Australia, there is no cap or sliding
scale on the royalties, which run at 5% of the sale price, the
collection agency taking 10% of what is collected. This only
applies to sales where an art market professional (dealer,
auctioneer etc) is involved. As in Europe, sales between two
private individuals do not attract ARR.
As artworks in Australia do not regularly go
for more than €1m (approximately A$1.25m), royalties applicable
would rarely exceed €45,000 (a bit over A$56,000). The Australian
Government does not have to ponder a heady "Picasso situation"
where, say, an €80m work would reap the heirs a €3.6m windfall. No
doubt the Picasso heirs would wish they lived under an Australian
model of ARR. Thus the "moderating factor" of a cap and a sliding
scale on ARR, deemed appropriate in Europe, appears less necessary
under current circumstances in Australia.
It is a country that accepts the notion of
inheritances so, it is argued, why not get something out of the
artistic labours of grandad or grandma? In this regard the
Australian model of ARR is "fit for purpose", you might argue (at
least for the present).
The second difference Australia experiences
is that it is not competing with other centres as a world clearing
house for artworks. Theoretically business is not, therefore,
driven elsewhere or lost to others not applying ARR. However, it
has been noted that some artworks were shipped from Australia to
New Zealand for a while (and this may still be going on) in order
to somehow avoid ARR which has yet to be implemented in New
Zealand. This activity is unlikely to have a major economic impact
or create ripples on the clearing of artworks around the world.
It is the third issue that presents
problems. Collection and distribution in Australia is by a single
agency, CAL - a "not for profit company limited by guarantee". The
company tendered for the five-year contract which will be reviewed
in due course. Collection is effectively compulsory. It is possible
for beneficiaries to "opt out" on a case-by-case basis provided
they know that a relevant artwork has been sold somewhere.
Herein lies the first problem. An artwork is
sold and ARR collected, then the agency has to find to whom it is
to be paid. Apart from the problem of unsigned works there is the
issue of the indigenous artist. He or she is often on a reserve or
in a community, frequently with a very different demographic to
other artists who leave a much larger footprint for being traced
(telephone numbers, street addresses, business registration etc).
In the case of heirs this is further complicated by very different
indigenous family and community social structures. It is to be
remembered that these were the very people for whom ARR was
primarily introduced to benefit.
Clearly making ARR an "opt in" scheme vastly
reduces costly and time-consuming search-and-locate missions by the
collection agency. Government money would be well spent encouraging
artists to register ("opt in") rather than its agency using
resources often chasing shadows.
What happens when an artist cannot be traced
and collected funds are undistributable? After six years of
diligent searching by the agency, the money is returned to the
payer less the 10% administration fee but, interestingly, with
interest (another difference from Britain)! One hopes the money is
keenly invested and the interest is compound. If the original payer
of six years ago is then not found the money may be retained by the
agency for administration purposes. It seems most likely that this
will be an undesirably and unnecessarily large sum, for reasons
outlined above. It would be almost zero if the scheme were "opt
in". This seriously questions the existing system's efficiency.
Finally there is the issue of the threshold
for payment. This stands at sales of A$1000 or more. This means
sums as low as around €36 will be payable to beneficiaries (agency
commission €4). This is hardly an economic proposition or good
business practice in terms of collection costs. With regard to an
A$1000 threshold, it would seem the system is not efficient or
The Australian Antiques and Art Market
Federation (AAAMF) has lobbied on both issues. It seeks an "opt in"
system and a threshold of $10,000 (approx €8000, commission €40).
It remains to be seen if the Australian government's review in mid
2013 will take this on board. One thing claimed is that because the
Australian collection agency is accountable to government, there
will be more transparency than there apparently is in Britain. We
are promised all facts and figures. We await with interest -
compound of course.
What might Picasso have thought about all
this? He is also quoted as saying: "I'd like to live as a poor man
with lots of money." So would he have cared about ARR? Presumably
his heirs do - very much.
• Jolyon Warwick James runs an antique
silver business in Australia and is President of the AAADA (NSW
Chapter), Board member of CINOA and Chairman of AAAMF. Tel: +61 2
93261319 or email email@example.com
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