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The art of restructuring royalties -

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LISA MILLAR: There's a mixed response to a Federal Government plan to introduce a new royalties
scheme for artists.

The resale scheme means artists will get five per cent of the sale price of their work each time
it's resold.

The big winners are expected to be Indigenous artists who've sold work before they became
prominent.

But gallery owners say the scheme could be extra administrative burden and may drive people away
from the art market.

Michael Edwards has this report.

MICHAEL EDWARDS: Aboriginal art is now renowned across the globe and often attracts high prices at
auctions.

But many artworks were originally bought off artists who at the time were unknown and therefore
unable to command a price commensurate to the art's value. This art was then resold for
significantly higher prices.

But the Government aims to address this balance by introducing a resale royalty scheme. The Arts
Minister Peter Garrett announced the scheme at the Papunya Tula Gallery in Alice Springs today.

PETER GARRETT: I expect that this resale royalty scheme will provide ongoing good benefits for
artists, particularly for Indigenous artists who have seen quite strong escalations in the price of
their work after the first sales that they've had, particularly in the strength of both the market
here and also overseas.

This resale royalty scheme is intended to meet the needs of balancing the interests of the art
industry and the rights of visual artists to get some return for their work when it's on-sold at
much greater prices.

MICHAEL EDWARDS: The royalty will be calculated based on a flat rate of 5 per cent, uncapped.

PETER GARRETT: The five per cent comes from the figure which is taken as a resale royalty from the
resale of the art product itself. We anticipate that there will be a single collecting institution
which will be required to both collect and administer the scheme. We'll tender for organisations to
bid to be that collecting institution.

By doing that we'll ensure that tenderers take into account a simplicity and clarity of executing
the scheme and also price. We don't believe that there needs to be an unnecessarily high
administrative burden or unnecessarily high costs in the administration of that scheme because of
those arrangements.

MICHAEL EDWARDS: The scheme has been welcomed by many in the Indigenous art world.

Daryl Sibosado runs the Boomalli Aboriginal Artist Co-operative in Sydney.

DARYL SIBOSADO: I guess with a lot of Indigenous artists, visual artists, especially the ones
living in more remote areas, people who are aware of the market for Indigenous art go out to these
areas, not necessarily always out there, they do it in the cities as well, and they purchase art
from you know quite sort of emerging artists maybe, well they're not really emerging in the
Indigenous world but on the art field they probably are, and people purchase their art at quite,
very cheap prices and then resell them at, you know, huge prices. The artist doesn't actually see
any of that benefit.

MICHAEL EDWARDS: And Mr Sibosado says it won't just be just individual artists who benefit.

DARYL SIBOSADO: Well I think it will, especially for Indigenous artists as I said in the remote
areas because a lot of the money from their work goes directly back into the community. So it won't
be just them individually benefiting from it. It will be the community in general.

MICHAEL EDWARDS: But there are concerns in the wider art world that the scheme may place
unnecessary burdens on gallery owners.

Guy Abrahams is the National President of the Australian Commercial Galleries Association.

GUY ABRAHAMS: The ACGA's position is mixed on this in as much as a number of our members are in
favour of the scheme and a number of them are opposed. Personally I don't think that it's a
necessary scheme to enable artists to get appropriate benefits from the sales of their artworks.
But it seems the Government is committed to introducing it and what the ACGA would say is that it's
very important that the administration of the scheme, the operation of the scheme doesn't impact
negatively on the primary sales of Australian artworks.

MICHAEL EDWARDS: The Government expects the scheme to be up and running by July next year.

LISA MILLAR: Michael Edwards with that report.