Government appoints CAL to manage artists’ resale royalty scheme

The government has engaged CAL to manage the artists' resale royalty scheme that came into operation on 9 June. CAL's engagement follows an open tender process.

The scheme implements a 2007 government election commitment. On introducing the legislation containing the scheme, the government said:

The introduction of a resale royalty scheme will allow visual artists to share in the commercialisation of their work in the secondary art market. This will benefit visual artists who derive their main creative income from the initial sale of original works.

These artists do not have the same range of opportunities as other creators such as writers and composers to earn money through licensing reproductions, public performances or broadcasting their work.

The scheme will entitle artists to a 5% royalty on commercial resales of $1,000 or more that occur after 8 June this year. The royalty will apply to existing as well as new works, but will not apply to the first change of ownership after commencement, even if that is a resale.

As a consequence, the royalties collected will initially be small, but will increase as more works change hands for the second time. The scheme will enable the collection of royalties for Australian works resold in other countries such as the UK, France and Germany, and CAL will be contacting the relevant collecting societies in those countries to begin establishing reciprocal relationships.

CAL's members include artists who will be entitled to resale royalties. Half the value of the Top 50 art auction sales in 2009 was for CAL's members' works. Forty four per cent of those are Indigenous artists. CAL will now begin contacting other artists whose works are likely to generate resale royalties in the future to let them know how the scheme works and how to become a resale royalty member of CAL to claim future royalties.

The government is providing $1.5 million over three years for the implementation of the scheme. A significant proportion of this will be used for a public education campaign for artists and the art trade. The education campaign for artists will be able to cover other issues associated with artists' livelihoods, such as reproduction and communication of their work, and will encompass collaboration with other organisations that provide artists' services.

From 9 June, sellers, buyers, auction houses, commercial galleries and art dealers will be legally obliged to provide information to CAL about all commercial resales, including those that do not generate a royalty. CAL envisages that the data collected under the scheme will be useful for other purposes, such as provenance.

As part of the implementation process, CAL will set up two advisory panels; one representing artists and the other representing the art trade; to ensure that CAL's administrative processes work with existing industry practices.

CAL's CEO Jim Alexander said that the commencement of the scheme represents the culmination of more than
20 years lobbing by artists. 'CAL is very pleased to have the opportunity to bring its expertise in copyright management to this important new scheme for artists. The scheme will redress the obvious inequity when an artwork purchased for a few hundred dollars is resold for a much higher price.'

Some FAQs

Which artworks are covered?
The artworks covered include paintings, drawings and sculpture, as well as works such as ceramics, glassware and tapestries, and newer forms of artistic expression such as installations, digital artworks and multimedia artworks.

Limited editions are covered, provided each copy is authorised by the artist. Examples are limited edition prints (such as etchings and linocuts), photographs and sculptures. On the other hand, mass-produced items, such as posters, are excluded.

Manuscripts are excluded.

What if the artist has died?
The resale right lasts for 70 years after the artist's death.

What if there is more than one artist?
If each artist is Australian, or from another country with a resale royalty scheme, then the royalty is divided equally between the artists unless they have agreed differently.

What about online auction sales?
Royalties will be payable on resales through online auctions if all the requirements are met (for example, the sale price is more than $1,000).

How much money will CAL deduct from my resale royalties?
CAL has undertaken to the government that its administrative fee will not exceed 10%.

More information
There is more information in the two information sheets on our website (one for artists and the other for the art trade). Or contact Zoe Rodriguez or Libby Baulch at CAL.

Extraordinary General Meeting (EGM)
The Government has requested that CAL's Constitution be amended to specifically acknowledge some aspects of the new scheme and to that end an Extraordinary General Meeting (EGM) of members will be held at CAL's offices on Thursday 6 May 2010 at 4.30pm.

Papers for the meeting will be posted to all members next week and a copy of the Constitution with the proposed amendments will be available on CAL's website later today.

Download CAL's EGM Papers