In July 2010 was announced that the Cooper Recommendations will be absorbed into Australia’s new laws for Self Managed Super Funds. Clearly, art has been diagnosed in these quarters as a non-yield asset. Regardless of its proven capacity to hold its value in the market, it doesn’t make the grade along with stocks and shares, bricks and mortar.
Meanwhile back in the Ministry for Environment Protection, Heritage and the Arts Minister Garrett is busy rolling out and steadfastly defending his Resale Royalty Scheme, which will introduce a 5 per cent levy on commercial galleries and collectors.
Imposing now a five-year moratorium to divest SMSFs of artworks will penalise thousands of retirees at least 5 per cent of the value of those artworks due to the resale royalties legislation.
What we have is a perfect storm! It is a crunch time for the arts industry.
Rather than simply moan and groan, I propose a solution by providing some simple, direct stimulus measures that can maintain the policies the Minister wishes to advocate, but at the same time stimulate the local visual arts sector:
Allow a 25-30 per cent tax rebate for all art collectors who purchase art by living Australian artists. A useful notional rate at which to start this scheme would be for purchases of artworks $3,000 and upwards.
This would create an incentive for the private sector to put some money back into the arts. While the new policy initiatives seek good outcomes in theory, they effectively remove funds as well as commercial incentives from the commercial visual arts sector. The government is thereby unwittingly undermining confidence in this sector – once again due to a lack of industry consultation.
If you agree with my solution to avert this perfect storm, please let me know! More importantly, let you local parliamentary representative know, let your local artists, your local galleries know, and your local newspaper know.
The arts industry needs straightforward incentives for people to buy art. We need the government to stop acting offhandedly as gatekeepers to an industry they barely understand, but desperately want to control.
