The Australian art market in 2010 recorded sales of $110 million, up from the 2009 Global Financial Crisis affected art market with total sales $88.2 million, but a far cry from the boom times of $176.6 million in sales recorded in 2007.
Behind all these sale results goes the unreported story of a flight to quality in both the international and Australian art markets where record prices are paid for “the names” whilst sales for young and emerging artists, which traditionally underwrote the contemporary art sales, have fallen away post the Global Financial Crisis and are showing no signs of recovery,.
It is not my intention to question the reasons for this weakness in the market for young and emerging artists internationally but I do wish to offer an explanation for the decrease in demand and sales in the second tier art market here in Australia.
Australian art buyers, like their international counterparts pay particular attention to artists who record strengthening secondary market sales (known as pedigree in the auction market), and this is reflected in the fact that 70% of Australia’s art auction turnover in 2009 was achieved by sales of fewer than 50 established artist’s work and that 30% of the Australian art auction sales recorded in 2010 were achieved by sales of no fewer than 10 artists work.
Australian auction houses recognised the trend of a ‘flight to quality’ by Australian art buyers and accordingly auction catalogues are listing more and more works by fewer and fewer Australian artists at the expense of quality, low value artists of the mid 20th Century to present day who make up the low end of the secondary art market.
I make particular reference to artists such as Robert Waden (1900-1946), John McQualter (b.1946), David Dridan (b.1932), Tom Garrett (1879-1952), Harley Cameron Griffiths (1908-1981), most of whom sell within the $1000 – 2000 price range at auction today.
The other segment to the low end secondary art sales are the works by young, emerging and Indigenous artists and it is in this sector that the greatest fall away in sales is being recorded.
The principal reason for this is two-fold and both involve new levels of bureaucracy brought about by Government and quasi Government institutions endeavouring to represent and recoup money in the form of royalties and copyright payments for artists.
On June 9 2010 the Resale Royalty Right for Visual Artists Act 2009 came into effect, and a collection agency (CAL) was appointed to administer the scheme.
It is now required of all art sale professionals, to report all sales of visual artworks including artists books, batiks, carvings, ceramics, lithographs, multimedia artworks, paintings, photographs, pictures, prints, sculptures, tapestries, video artworks, weavings and any other things prescribed by the regulations, to CAL from June 2010.
In the instance of an item being re-sold for greater than $1000 a 5% royalty is to be paid to the collection agency for distribution to the artist or the artists family, subject to the terms and provisions within the Act.
It is not my place in this article to argue the sense (or lack of it) of this particular legislation but I do wish to point out that similar legislation elsewhere in the world has a much higher value threshold against which the royalty payments commence and no other country in the world requires the reporting of qualified art sales below that much higher threshold value.
CAL argue that the reporting of sales below the $1000 are necessary in order to prove a resale has occurred in subsequent years, however the most obvious application to this particular form of collected data would be the introduction of a capital gains tax based on recorded evidence of all art traded and sold and reported through the scheme.
The reporting proforma provided by CAL insists that each item offered and sold needs to carry full description and a digital image assisting in the future identification of the subject work and it is the reproduction of the image that invokes the second quasi Governmental bureaucracy in the sales process, that being Viscopy, a collection agency established in 1996 to gather payments from institutions and auction houses for the reproduction of an image either in electronic or printed form and the payment of these copyright fees to artists registered with Viscopy, less Viscopy’s handling fee (20%).
Unlike the Resale Royalty Right for Visual Artists Act 2009, participation by artists in Viscopy’s copyright collection business is voluntary and accordingly artists need to register with Viscopy before Viscopy can enforce the collection of copyright fee.
Since Viscopy only came into being in 1996, the vast number of artists represented are young emerging or Indigenous artists (contemporary) whilst a few of the more established artist (the names) have either signed on in person or their estates have contracted with Viscopy in order to receive a copyright fee.
A summary of the fees are detailed below (see table I) and I will concern myself only with the fee relating to a reproduction of an item in digital form (see table II).
Table I
Reproduction Format
Standard Rates
(per image, GST exclusive)
Print + online catalogue, full page image, print run 4000 $394
Online only auction catalogue $148 per year
Promotional email $148
Promotional brochure, quarter page image, print run 3000 $456
Newspaper advertisement, i.e. Sydney Morning Herald, quarter page image $1219
So to explain the dilemma facing young, emerging and Indigenous artists let us now view the costs associated with the sale of a work valued at say $500.
Table II
Sale Price $500
Auctioneers Commission (inclusive of insurance) 20% + GST $110
Lot Offer Fee (reporting costs and collection costs by Auction house for CAL and Viscopy) $55
Viscopy Copyright Charge (online only) $148
Net Amount to Vendor $187
The costing model barely works for a sale at $500 but in the event of works sold at under that amount neither the auction house nor the vendor can be seen to gain financial benefit from the transaction and accordingly auction houses are now refusing to list low value works by young, emerging and Indigenous artists.
The Australian art auction market will, through the action of conforming to the Resale Royalty Right for Visual Artists Act 2009 and payments to the artists, through Viscopy, exclude young, emerging and indigenous artists from their art catalogues with the eventual result that the Australian art market will narrow to a band of fewer than 100 artists being represented in secondary art sales and the denying young artists a financially viable future.
