by Louise Martin-Chew
Sidney Nolan's First Class Marksman,1946.
Dramatic events of the past month have culminated in Julia Gillard’s bid for election on 21 August 2010 as first female Prime Minister of Australia. But what of her agenda for the arts – given the disastrous impact of the initiatives of the Rudd government’s Prime Ministership? Sadly, the arts are far from the top ten agenda being discussed today, yet as a sector there are many now fighting for survival. For in recent weeks the Resale Royalty Right for Visual Artists Act 2009 (from 9 June 2010), which enshrines the droit de suite principle into Australian art markets, coupled with the spectre of the Cooper review into superannuation removing art from allowable assets for Self Managed Super Funds has the visual arts in Australia reeling. These are body blows to a sector already working hard to survive an economic downturn. Both of these changes come somewhere from the psyche of auctions as a spectator sport.
It is awesome, watching small painted sections of canvas in frames sell for stratospheric prices. Witness the Sidney Nolan painting, Ned Kelly, First-Class Marksman, 1946, which sold on March 25, 2010 for $5.4 million – becoming the most expensive Australian artwork to date. Auctions are a spectacle, as realization of cultural capital is reflected in monetary terms. Those outside the industry may mutter, “That’s ridiculous” and, in a way, it is. Art is something in which most people have some emotional investment, and therefore an opinion. What is underappreciated is that, while we can all see the art, decoding the layers in images is a specialty like any other. And large sums of money for art are a simple enough byproduct of that appreciation.
However, recent initiatives from the federal government would suggest that some are uncomfortable about the success, in recent decades, of the visual arts industry, and with the sums of money on offer. Is the resale royalty legislation a systematic attempt to shred that success, with some sort of outdated attack on the commercial sector which is the backbone of the support structure for artists? For every government dollar invested in the arts, considerably more than that is generated from the commercial sector.
Like motherhood, it is difficult to argue with the sentiment behind the Resale Royalty scheme, which is to return money to artists - with a special emphasis from Arts Minister Garrett in selling the policy to bring monies back to indigenous artists in particular.
The trouble is that the legislation, like some other Rudd government initiatives, has been built and rolled out with haste, ignoring detail, and goes against the direct recommendation of the Senate Committee which enquired into this notion for Australia. The resale royalty administrative load has crippled galleries in the first two weeks. Essentially it will operate as an additional tax on art sales, with galleries likely to pay the 5% royalty on each and every sale themselves. This is particularly difficult for art centres in Indigenous situations, with artists no longer able to sell their work easily for a cash reward, with the necessity that they will instead be asked to consign it to galleries to be paid when sold. This is a dramatic change for this part of the sector, and one which will cripple the artists it purports to help the most.
Increasingly strident criticism has been compounded by what is seen as a worse handicap looming over the sector, and that is the removal of art from the allowable assets of self managed superannuation funds. It is another symptom of the removal of individual responsibility for asset management, with apron strings being administered by a government who wish to save us from possible mistakes. The central plank of this argument is that art is not necessarily a safe investment. What is a safe investment may be the subject of debate as the Global Financial Crisis continues to claim the solvency of some European countries - shares? banks? real estate? Like every industry, the more you know and the better your advice, the more you may profit. This particular recommendation from the Cooper review also suggests that all SMSF will need to divest themselves of art in the next five years, with the inevitable result a flooded market for art in Australia.
Galleries are fearful of the fallout, and it is possible to see this as a watershed moment, at which government intervention in the visual arts in Australia wantonly destroyed the vitality of our commercial sector. In the 1970s, with the John Maynard Keynes post war model of arts subsidy still operative in Australia, the government was seen as the agenda-free and benign profferer of funds to artists. In 2010, it is clear that there is nothing agenda-free about the government’s administration of funds and policy. The question is, are these new initiatives designed to cripple a commercial sector that provides essential support for artists? Or sheer incompetence - more policy on the run?
In terms of the resale royalty, the statistics of such schemes in other countries tell a salutary tale – with the vast majority of funds flowing to the big ticket estates (Picasso, Matisse – hardly support for the needy!). The administrative burden of managing such schemes internationally has seen them reduced in recent years, just in time for Australia to pick it up and demand that this burden be borne by the sector that does most to support and develop, in a hands-on way, individual artists.
We’ve had a strong ten years, and the prognosis for visual artists has been as good as ever in Australia. However, it is possible to predict that if the Cooper review is passed in the flurried way that the resale royalty was pushed through, without significant consultation and amendment, this will, suddenly, end. And the victims will be the artists that the resale royalty scheme purports to help.
Are governments seeking to remove independence and the ability of business to manage itself, in order to give back to artists through a more passive funding model? A vibrant commercial sector is more powerful than any government handout. The urgent issue for the arts this week/month/year/decade is the resale royalty/Cooper super review, and rushed government changes that threaten the commercial gallery sector. There is a sense of desperation in the galleries that support artists on a day to day level, and we might look back to this watershed moment.
Both of these initiatives have a sideways fix on those rare moments in the auction rooms – the resale royalty seeking, at the most basic level, to return some of these “spoils” to the artist, but at the same time doubting the inherent cultural value in those objects by removing them from the “allowable investment” category in the SMSF of individuals. It expresses confusion, a cynicism, distrust of individual responsibility – all of which I had hoped was long gone in the Labor Party. At best, this is ham-fisted and naïve ideology, at worst, a cynical decimation of the success of the commerce of art.