I’ve been reading a recent House of Representatives standing committee report on the Resale Royalty Right for Visual Artists Bill 2008 *. Essentially, it looks at the implementation and possible consequences of the proposed legislation to give a proportion of art sale proceeds to the original artist.
At first I thought it was looking at the pros and cons of a resale royalty, but unfortunately it was only formed to make recommendations for changes to the bill as put forward by Peter Garrett. The studies into the pros and cons have already come and gone, apparently without much public notice (certainly not mine!), and anyway it was an election promise by the ALP, and required by Australia’s signing of the Berne Convention for the Protection of Literary and Artistic Works in 1971. Yes, 1971 – it’s taken 38 years to comply with international law in this respect. I think that counts as a strike against those who claim government works quickly or efficiently.
So it’s a done deal, with only the details to be worked out – minimums, maximums, whether it applies to all sales or only ones after the first one, etc. Which is a pity, because I’m interested in why a resale royalty is desirable in the first place. I can think of several arguments against it.
The stated purpose is to:
“to help redress the imbalance between the treatment of other artists (eg authors, musicians) by recognising an ongoing relationship between the visual artist and their work”
I suppose the ‘imbalance’ is that authors and musicians get royalties. But they get them when their work is reproduced, not when it is on-sold. A royalty in that case is basically a purchase of their work. The legislation being examined by the standing committee is a totally new way of applying royalties that does not apply to books or music, so if anything, it’s creating an imbalance, not rectifying one.
It is quite different when there is just one artwork instead of many copies. If we look at other things in which the value is not in the reproducible content, but in the thing itself (eg houses), you can see the inappropriateness of having a royalty imposed on every single transfer of ownership from that point on. Can you imagine the architect or builder demanding their percentage whenever you move house?
Economic modelling was commissioned to see what effect a resale royalty would have, and the consultancy said:
“who bears the actual economic cost of the royalty, and, most importantly whether eligible artists would be net beneficiaries of such an arrangement is not at all clear.”
That is, would there be any real benefit?
Speaking of modelling, a lobby group did some number-crunching on the funds gathered if certain scenarios had been in place over the last 10 years , and came up with payments to artists of about $35 million if you include every sale, and under $5 million if you only count every sale after the first one. I have to wonder, did they make adjustments for the change in behaviour likely to occur if a resale royalty is applied? What I mean is, if you know you are going to pay a percentage of the sale price, wouldn’t you up the price by that much? And wouldn’t that in turn impact on demand? **
An important objection I would make is that policing this is going to be costly. Some of the discussion in the report is on whether private sales should be excluded, how to deal with eBay and the like, and so on. Since the amounts we are talking about aren’t really that much (about $1,000 a year for eligible artists, even under the most optimistic scenario), you have to consider if it’s worth the cost of monitoring and enforcing compliance.
I should note that any royalty system benefits well-known artists the most, so it won’t do anything to alleviate the plight of stereotypical struggling artist either.
All up, I really can’t understand why such a concept was included in the Berne Convention, and why Australia signed up to it. Actually I can – lobby and interest groups wield far too much power over governments.
* Amusingly, the RRVAB 2008 says that “An artwork is an original work of … art” (LOL!) and that “Works of … art include [pretty much everything]”. One suggestion to the standing committe was that “artwork must have artistic quality”. Seriously, you couldn’t make this stuff up!
** It reminds me of the laughable figures ARIA comes up with about lost sales due to music ‘piracy’ – they assume every digital download equals a lost hard-copy sale. Which is stupid – free=overconsumption, so therefore illegal digital downloads are always going to be higher (maybe much, much higher) than CD sales would have been without the internet.