Industry gossip suggested there were only two tenderers for the position of collecting society, CAL and Viscopy, the latter being the pre-announcement favourite, due to its existing function in the visual arts sector of collecting royalties on behalf of artists on reproductions of their work, principally in auction catalogues.
CALs activities in the past, have been more with the written word, collecting royalties on behalf authors, journalists, visual artists, surveyors, photographers, and newspaper, magazine and book publishers.
CAL is a far larger organisation than Viscopy with central Sydney offices and a staff of over 100. Whilst Viscopy paid out $2 million to artists in the 2009 financial year, CAL's payout to authors and other creators was in excess of $100 million. The 2009 CAL Annual Report shows that the payments were distributed to publishers 75%, authors 9% and overseas collecting societies 15%.
Establishing relationships with auction houses and galleries, the principal sources of secondary art market sales and therefore the payers of resale royalty, will be new territory for CAL.
CAL is charged with setting up the resale royalty scheme, establishing an advisory body, collecting and paying royalties to artists, educating the sector about the scheme and developing reciprocal arrangements with other countries that have resale royalty schemes in place.
Minister Garrett said the Act, which passed into law in December 2009, establishes, for the first time, the right for visual artists to receive five per cent of the sale price when works are resold through the art market for $1000 or more. The right applies to living artists and for a period of 70 years after an artist’s death.
Artworks covered by the scheme include paintings, drawings, forms of fine art textiles, installations, fine art jewellery, artist's books, carvings, and multimedia artworks. The scheme is prospective, applying only to resales of original works acquired after the scheme takes effect.
Once the scheme starts, the resale royalty will be payable on the second sale of an artwork. “This means buyers will purchase works knowing that when they resell them the royalty will be charged. The resale royalty will not apply to the first sale of works that were purchased before the scheme started,” Mr Garrett said.
“CAL will charge a flat 10 per cent administrative fee of royalties collected, to cover the costs of implementing the scheme. For example, the resale of a $1000 artwork will entitle an artist or right holder to $45—a royalty of $50 less the 10 per cent administrative fee of $5.”
The Australian Government has committed funding of $1.5 million over three years for the collecting society to set up the scheme’s administration. The scheme will operate from 9 June 2010.
