Art dealers up in arms over levy

Though many concede the intention was honourable, the effect, they fear, will be dreadful. Prices will rise, administration costs will multiply, and only those artists who are already well off will see any significant benefit, the critics say.

”I don’t know anybody who thinks it’s a good thing,” said Sydney art dealer Martin Browne of the plan to levy a 5 per cent royalty on the sale of every work of art worth more than $1000. ”It’s a tax on people who have already supported an artist.”

The levy will apply on every transaction other than the first purchase, and whether or not a profit is made. Private sales are exempt, raising fears that more transactions could move out of the visible space of galleries and auction houses to the invisible private realm.

The levy is payable by either the vendor, the purchaser or the dealer. At this stage, it applies only to Australian artists, but reciprocal arrangements with other countries with similar schemes are likely by the end of the year. The money collected will go to the artist, or to the estate of a deceased artist for 70 years after their death.

It is commonly believed that the primary aim of the scheme was to return money to artists in remote Aboriginal communities whose work sometimes increases exponentially as it passes through the chain of ownership. A painting sold in Yuendumu for a few hundred dollars can sometimes change hands for tens of thousands of dollars within a few years.

But critics say such escalations in value are almost unheard of outside the indigenous art scene, and even within that scene only a minority of artists enjoy them.

”The Aboriginal scene has been the most explosive art market anyone can remember, but most of the market doesn’t behave that way,” said Richmond dealer Charles Nodrum.