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Monday, 7 September 2009
Page: 8774

Ms PARKE (4:40 PM) —I rise to support the Resale Royalty Right for Visual Artists Bill 2008. The bill addresses the key issue within the operation of the Australian art market, namely the question of a royalty for the resale of visual artworks. The measures put in place by this bill will have the effect of giving visual artists a residual financial interest in their creative works. This is a step forward that has been under consideration for a long time and that the arts community has advocated for a long time. With the implementation of this measure, Australia will join more than 50 countries that already have some form of artist royalty in place. The introduction of a resale royalty will allow the art market to operate in a way that produces a fairer outcome because it will ensure that the creator of artistic value can continue to receive a small, but appropriate, financial share of any commercial value derived from the resale of their visual artworks.

It has been said in the past that fairness is not a proper imperative of the market. I wholeheartedly disagree with that. As I have observed in this place before, markets are not natural phenomena. Markets are not ruled by physical laws like gravity, even if the global financial situation appears to indicate otherwise, and they are not in any sense elemental. A market is a mechanism created by humans. It is a regulated environment that shapes, and is shaped, by human behaviour and by human values, both good and bad. Markets take many forms and can produce varied outcomes. Those varied outcomes can sometimes be produced out of identical conditions. A market is by its nature dynamic, both in its processes and in its capacity to adapt over time to changing external conditions.

Unfortunately, the term ‘free-market’ carries with it two associations that are not accurate or useful. The first is that markets are somehow natural; that they arise naturally and, like nature, should be left to exist in their natural state. The second is that markets and regulation are somehow inimical to one another. While preparing to make my contribution to this debate I reflected on the incisive and even iconoclastic thoughts of a Fremantle constituent, Gary Burke, who I met earlier this year. Mr Burke is a musician and arts entrepreneur of note in Fremantle with a background in economics, a passion to which he has now returned out of a fundamental conviction that the frames through which we regard and analyse public policy have become fixed through a kind of normalised faith in a set of all powerful economic precepts. Gary Burke calls this fixed view, or orthodoxy, ‘economism’. I think he is right that certain assumptions about what is, and is not, good public policy spring from a kind of economic political correctness that has gone unquestioned for too long. A market and its framework of assumptions and regulations are not antithetical; they are co-dependent. The truth is that markets are entirely defined by regulation and by the laws and institutions that underpin them, including the right to property, the laws of contracts and an established national or international means of exchange.

This bill adds a design feature to the Australian secondary art market that responds sensibly to the idiosyncrasies of that particular market. The secondary visual art market trades in a product whose value has the following more or less specific characteristics. The value in a work of a visual art is not empirically quantifiable and its true value is commonly revealed or determined over time and through a series of transactions. The value in an art product grows with the development of the artist creator’s own reputation. It is a value that accrues over time to single works of art but is in fact a product, or outcome, of all of an artists’ work.

In addition, the value of visual art is chiefly derived from the artistic or creative spirit that gives rise to it. Though a work of visual art is therefore made valuable by its creative concept and design rather than by the material or even the labour that forms it, the design value or intellectual property is almost entirely vested in the physical work or object itself. So, unlike musical performance or literature, there is little scope for visual artists to receive any ongoing reward for the growing popularity and value of their work.

It should also be noted that in the Australian art market, as in so many areas of Australian life, Indigenous artists have often fared worse than non-Indigenous artists when it comes to having their work acquired at less than its true value. ‘Struggling artist’ is a tautology, so the joke goes, and Indigenous artists, like Indigenous Australians across the board, generally stand at a comparative disadvantage to non-Indigenous Australians. It is a truism of the market that the strength of your bargaining position depends to some degree at least on your financial position and on your market knowledge. Artists, especially young and Indigenous artists, commonly make their bargains from a position of financial weakness and sometimes from a position of market ignorance, relatively speaking.

There is nothing efficient or reasonable about that and there is certainly nothing fair about it. There is no larger economic benefit to having certain art market dealers profit in their dealings with artists simply because they know more about the business or because they are bargaining from a position of financial strength with a person who may be desperate for a sale at any price. One might say that the unfairness that results, in such circumstances, is just part of the rough-and-tumble of the free market, and that may be so. But that is no argument against the change that is made by this legislation, a change that will partly remedy those situations where an artist is gulled out of their work at an unfair price only to see it subsequently change hands for many times that amount. For all these reasons, it is appropriate that this legislation create an ongoing financial interest for the artist and their heirs in transactions that involve their works of art.

This legislation gives to Australian artists a right that is already recognised and in practice in more than 50 countries. The right to a resale royalty has existed in Germany, which is the EU’s third largest art market, since 1965. By joining those countries that already have a resale royalty for artists, we are acting in a way that is entirely consistent with the Berne Convention for the Protection of Literary and Artistic Works and the World Trade Organisation’s Agreement on Trade-Related Aspects of Intellectual Property Rights. So, by introducing an Australian art resale royalty, this government is doing three very important things: we are honouring another election commitment, we are honouring the spirit of international treaties and conventions to which we are a party and, as a result of honouring those obligations, we are giving our artists reciprocal access to the resale provisions that exist in other countries.

Under the Berne convention, Australian art sold overseas has not attracted a payable resale royalty in those countries for lack of an equivalent scheme here. It is a matter of national pride that art from a country as small in population as Australia nevertheless has a place of significance on the world stage, but really it should come as no surprise that a country whose Indigenous heritage includes the oldest known works of art in the world, and whose Indigenous culture is with us now as the longest continuous strand of human civilisation, should produce art and artists of such quality, power and magic. For artists, however, while recognition and national pride are important, financial security and wellbeing are absolutely essential. The passage of this legislation will mean that Australian artists will be appropriately rewarded for their international success when their art is resold in countries that have an equivalent resale royalty scheme, and this is long overdue.

The Fremantle electorate is an important centre of activity in the Australian visual arts. It is home to significant galleries like the Moores Building Contemporary Art Gallery; to arts organisations like Artsource, which provides advice, advocacy, administrative support and studio facilities; and of course to many individual artists, including Indigenous artists. As this bill has been under consideration, I have been contacted by artists and arts organisations in the Fremantle electorate who welcome the introduction of a scheme that will give them a lasting financial connection to their creative work. The arts community in Fremantle and in Australia as a whole has campaigned for the introduction of a resale royalty for many years, and I commend their persistence on this important issue.

This creative piece of market design adjustment brings about a small but significant change to the way that the secondary visual art market will operate. The bill will deliver a financial benefit to many visual artists, and it is a benefit that is well earned and overdue. This is a case of refining a market so that the market operates more fairly, though no less efficiently. Indeed it will operate more efficiently in that it will direct more of the financial benefit from the developing value of an artwork to the creator of the artwork’s value. It will in turn mean that many artists receive a financial return from their work as their creative reputation matures. As noted in an opinion piece in the Australian last month by David Hetherington, Executive Director of Per Capita, the progressive think tank:

… markets are a means rather than an end. They’re an effective mechanism to harness in support of our society’s development.

This is indeed legislation that harnesses the market in support of our society’s development in the visual arts area. This is legislation that effectively helps artists to help themselves. It gives them an appropriate stake in their own artistic development and improvement. I welcome it and I am confident that it will provide greater financial support to many Australian artists, particularly in the latter stages of their lives and careers.