Resale Royalty Bill, 2004

In March 2004, I introduced a Private Member's Bill that, if passed, would provide for a scheme that will, in certain circumstances, deliver payments to visual artists in the form of a resale royalty.  This speech is the speech that accompanied the '2nd reading stage' of this Bill in parliament.  The Bill has not been debated yet and it is now August.  It is unlikely that that it will debated under a Howard Government as the Howard Govt have just released a discussion paper on the issue, after months of procrastination.

The following is an extract of the transcript from the Senate:

Senator LUNDY  (Australian Capital Territory) (9.34 a.m.) —I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted

The speech read as follows—

RESALE ROYALTY BILL 2004

Rupert Myer in his Report of the Contemporary Visual Arts and Craft Inquiry 2002 stated that;

“A major issue for the Inquiry was whether Australia should introduce a droit de suite or resale royalty scheme that entitles the artist to royalties when a work of art is resold in the market. The Inquiry assessed the potential benefits for visual artists, the particular issues for Indigenous artists, and the likely impact the measure would have upon the market for contemporary art and craft in Australia, having regard to the international experience and local conditions. The Inquiry concluded that a resale royalty arrangement should be introduced.”

The Labor Party agrees with this view. That is why Labor announced on 9 October 2003 a new policy supporting a resale royalty scheme for visual artists.

Consequently I now present to the Senate the Resale Royalty Bill of 2004, which is a Bill for an Act to amend the Copyright Act 1968 in order to introduce a Resale Royalty Scheme for the visual arts, and for related purposes.

The Resale Royalty Bill 2004 will make it possible for a direct financial benefit to be paid to visual artists, of particular importance, indigenous artists, following the on-sale of their original work.

Labor believes an artist's resale royalty scheme will also assist in improving community recognition for the contribution of visual artists to civil society. It is also political recognition of the need to nurture and support both emerging and established artists.

Currently, artists are paid for their work only at the original point of sale. This scheme will provide for additional payments to artists if their work is on-sold under certain conditions. This allows artists to earn income from their work as it increases in value.

The Resale Royalty Scheme will be implemented through amendment to the Copyright Act 1968. It involves the establishment of a collecting society authorised to receive moneys on behalf of the artists through an art market intermediary.

The definition of an art market intermediary under this legislation means an auction house, online auction, private gallery, agent or other art market professional who acts on behalf of the seller of an artistic work.

Labor's Resale Royalty Bill 2004 sets a resale right of 5 per cent payable on all acts of resale of artistic work that take place in Australia through an art market intermediary.

The introduction of this legislation is but one step in the right direction in recognising the value of artists and creating a new way to earn income from their profession.

Importantly, it has been delivered in a series of consultations with the National Association for the Visual Arts, The Arts Law Centre of Australia, the Australian Copyright Council, Viscopy and their member associations.

There is no doubt Australia's visual artists have been suffering under outdated and prejudicial copyright laws that do not fully reimburse them for their contribution to the art market.

The Myer report confirmed that a resale royalty scheme is both desirable and possible, and presented clear and concise arguments on the pros and cons of the inquiry recommendations.

Recommendation number five of the Myer report concludes the chapter titled `Valuing Artists' and it was this advice that inspired a new Labor policy which has resulted in the introduction today of the Resale Royalty Bill.

Usually Labor would develop such a policy in detail, and only when elected to government, would the opportunity arise to implement it.

Sometimes, however, there are pressing reasons to move more quickly to enact a change. Labor believes that artist's resale rights should not have to wait until after the next election.

Despite Senator Alston, the then Cabinet Minister for the Arts, committing the Howard Government to introducing this legislation before the end of 2003, there has no sign of activity since.

In the absence of a Government Bill on this matter, a private member's bill designed to fully implement a resale royalty scheme for artists is the only path to push for such legislation sooner rather than later.

There is a real sense of urgency now for a Resale Royalty scheme to be implemented and for a direct economic benefit to flow to our visual artists. It is a scheme which is needed now more than ever, hence Labor's decision to press ahead with a private member's bill.

Again, it is Rupert Myer who draws our attention to the economic disadvantage experienced by visual artists relative to other artists.

Myer believes that visual artists need to be able to earn a living wage to sustain their creative contribution. Indeed many artists have to work multiple jobs just to get by.

The Australia Council for the Arts in late 2003 released a report titled “Don't Give Up Your Day Job” which vindicated Myer's concerns about the struggle which Australian artists are confronted with every day.

The survey of 1063 professionals revealed that 50% of artists earn less than $7,300 from their art a year.

According to the findings, a third of practising Australian artists are living in poverty, with visual artists and females the most financially disadvantaged.

Only a quarter of respondents worked principally at their artistic occupation, despite almost 80 percent wanting to spend more time at their arts work.

All artists need to be able to earn a living wage to sustain their creative contribution, but in reality they are forced to work multiple jobs just to get by.

The harsh reality is that artists have already missed out on millions of dollars of potential income because they were unable to benefit from the increased value of their own work.

Perhaps the best and most well known example of this occurred with the resale of Water Dreaming at Kalipinyapa by artist Johnny Warangkula Tjupurra for $486,500 in July 2000, after the original purchase price of $150.

My colleague Bob McMullan jointly launched this policy with me and he spoke of how the GAMA Festival highlighted how central the work of visual artists is to so many indigenous communities.

Importantly, the Resale Royalty Bill 2004 will ensure that indigenous artists receive the artistic and financial recognition they deserve by preventing the worst of the manipulation and exploitation that has been seen in the art world in the past.

This bill also helps Australia keep pace with international developments. Schemes providing for artists resale rights have been mandated by the European Union through a directive that requires member states to comply by 2006 for living artists, and 2012 for artists' estates.

There are at least a dozen countries that already have a scheme in place, the most well-known being France's Droit de Suite (right to follow).

By introducing resale royalties, Labor will bring reimbursement of Australian visual artists in line with our other creative artists.

There are several key areas which deserve a more detailed explanation.

First and foremost are the definitions. An Artist is defined as a person who creates an artistic work, and the definition of an artistic work includes a painting, sculpture, drawing, engraving or photograph, and works of artistic craftsmanship. This definition includes craftworks or copies of works of art made in limited numbers that have been numbered, signed, or otherwise duly authorised by the artist.

The inclusion of such multimedia works in this definition is also important to ensure that a broad range of artistic works are encapsulated by this scheme, while allowing for the development of technology which enables the creation of new and exciting forms of original artistic works.

This Bill does not include the private sale of artistic works. Throughout Labor consultation, and as contained in findings of the Myer report, it was demonstrated that applying the right to private sales would be extremely complex, and raises a series of privacy implications, mainly due to the discrete manner in which many private sales are conducted.

Without a formal registration scheme, Myer found that it would be impossible to cover all transactions involving all works of arts. It is for these reasons that only public auctions and sales have been included in the Resale Royalty Scheme.

However it is important to note that a private seller will not be restricted or prevented from paying a resale royalty to the artist if they should so choose.

Similarly, should a resale royalty arrangement already exist between a seller and/or their art market intermediary and the artist—and that rate is greater than is consistent with this Bill, as is currently occurring with some private galleries, then the seller shall not be prevented from paying additional benefits to the artist, provided that the first 5% of the resale right has been paid to the nominated collecting society.

The Seller for the purposes of this Bill means the owner of an artistic work that is subject to resale.

The Resale Royalty bill will cover all artistic works which are created before or after the commencement of the scheme and importantly this clause addresses connecting factors between a sale and the application of the resale right under Australian law.

Labor believes that it is also important to have more than one connecting factor between a sale and the application of the resale right under Australian law.

These factors include a contract of sale governed by Australian law; artists who, at the time of resale are Australian nationals or have resided in Australia for a minimum of 2 years and; foreign artistic work sold in Australia where the artist is a national of a country that has a resale royalty scheme that provides a benefit to Australian artists.

Countries that provide reciprocal resale royalty schemes may also be prescribed by regulations.

The duration of the resale right is the copyright of the original artistic work, which under current Copyright law is life of an artist plus 50 years. This principle is consistent with the European Union Directive and international practice, although the period of protection in the EU, life plus 70 years, is currently longer than in Australia.

Also consistent with the EU Directive is that the provision in the Bill that the resale right shall rest with the artist, and may not be transferred or waived, and is therefore an inalienable right.

As mentioned previously, the Resale Royalty of 5 per cent shall be payable on all acts of resale of artistic work that take place in Australia through an art market intermediary.

The rate is applicable to the sale of all acts of resale (as distinct from payment only upon an increased sale price) so as to avoid legal complications and disputes arising from an inability to easily obtain previous records of sales and determine original value.

The rate of the royalty contained in the Resale Right Bill 2004 was determined after consultation with the visual arts sector and following recommendations arising out of the Myer review that the rate should be set at a flat rate of 3%-5% of the resale price of an artistic work.

This flat rate of 5 per cent differs from that in the EU directive which provides for a sliding scale for payments for the resale right which vary, depending on the price of the work, from 5%.

However, most countries which have implemented a resale royalty scheme have provided for flat rates of 3%-5%.

Labor has decided that a minimum sale price threshold will not be specified in this Bill, but rather allows for the minimum price subject to the right be prescribed by regulations.

Finally, the bill stipulates that the payment of the right may be made by the seller, or the art market intermediary, who is acting on behalf of the seller, directly to the authorised collecting society.

The Resale Royalty Bill 2004 does not specify a particular collecting society, only the measures required to name not more than one body to be the collecting society for the resale right.

Labor believes that it important that a collecting society meet all the requirements of this legislation and that a proper and transparent process occur in the selection of an appropriate body.

In consultations with the sector, we were notified that the artists collecting society Viscopy, intends to apply to be declared the collecting society for the resale right, an intention supported by organisations we consulted with.

In the situation of failure on behalf of the seller to meet these requirements, the collecting society is empowered by this legislation to bring an action for damages.

The ability to enforce these provisions are the principle reasoning behind the requirement for all payments to be paid through an authorised collecting society, as these rights may not easily be pursued and upheld by individual artists.

A collecting society is far better placed to pursue such claims and the Bill well provides for actions for damages through the Courts to recover unpaid royalties, as well as an existing reputation in the arts sector for pursuing these matters.

In conclusion, the areas of the bill I have outlined provide an insight to the development of Labor's position in these areas.

The Howard Government now has a choice to make. There are three options open to them.

First, support Labor's bill. Realistically this is the only way it will become law. Only five private members bills have been passed since Federation, and Government support is essential.

Second, they can oppose the bill straight or use government control of the legislative program to thwart its introduction and actual debate—a common tactic. If this occurs only a Labor win at the next election will see artist's resale rights come to fruition.

Thirdly, the Howard Government could deliver on their lip service and bring forward a bill of their own, that Labor would assess on its merits in a timely way.

The important part of this debate is that regardless of the Government's choices a resale right for artists will be implemented by Labor as soon as it is possible. We have acted on this important issue and artists can take heart.

Congratulations to artists and to their representatives. Their consistent articulation of the contribution that visual artists make to society and the need for economic benefit to be derived throughout the life of an artist has well and truly made a difference.

I also congratulate Rupert Myer for the diligence and care with which he approached an important inquiry.

I commend the Resale Royalty Bill 2004 to the Senate.

Senator LUNDY —I seek leave to continue my remarks later.

Leave granted; debate adjourned.