In its 2007 arts policy, New Directions for the Arts, the
Federal Government committed to a resale royalty scheme for visual
artists, based on the recommendation in the Report of the
Contemporary Visual Arts and Craft Inquiry of 2002.
In the May 2008 budget, the Government allocated A$1.5 million
over three years to support the establishment of the scheme.
The Bill was passed in the Senate on 26 November 2009 and
received royal assent on 9 December 2009.
How the royalty right works
A resale royalty right is a new copyright right under Australian
law, entitling artists to a percentage of the sale price each time
their work is resold. This right lasts for the life of the artist
and 70 years after the artist's death.
The artist receives the royalty even if the copyright in the
work has been transferred to someone else. The entitlement to the
royalty cannot be transferred but passes to the artist's estate
when the artist dies.
The philosophy behind the introduction of the royalty right is
to provide a stream of "royalty" to remunerate an artist
if the value of a work is not recognised at the time of the
original sale but increases over subsequent resales.
Main features of the Bill
The right will cover original works "of graphic or plastic
art", including pictures, collages, paintings, drawings,
engravings, prints, lithographs, sculptures, tapestries, ceramics,
glassware and photographs. This definition reflects similar
arrangements in the European Union.
The right will last for the artist's lifetime plus 70
The scheme will extend to works that were created before the
legislation takes effect, but will only apply to commercial resales
of works that are first acquired after the legislation comes into
force. In other words, the royalty will be payable on resales of
works sold through the secondary art market, where the seller
acquired the work after the commencement of the scheme, regardless
of whether this first transfer was made by sale, gift or any other
The scheme will include all resales involving art market
professionals, public institutions or organisations. It will not
apply to private sales between individuals, where there is no art
The right will apply to subsequent transfers of works for more
The royalty will be 5% of the resale price, with no cap on the
maximum royalty payable.
The seller will be liable to pay the royalty, but the scheme
allows for the seller's agent, or the buyer's agent, or the
buyer to also be jointly liable.
The Minister will appoint a sole collecting society to collect
and distribute the royalties following an open tender selection
process. This society will need to meet the criteria set out in the
Bill: for example, it will have to be a company limited by
guarantee and allow all people entitled to royalties to become its
Works by Australian artists sold overseas may also be eligible
for royalty payments under the multilateral copyright treaty, the
Berne Convention for the Protection of Literary and Artistic
The introduction of the royalty right has implications for both
artists and art market professionals. Artists will need to become
familiar with the mechanics of the collecting society arrangements
(once the collecting society is appointed). In negotiating
transactions involving the resale of works, sellers and buyers in
the secondary art market will need to clearly record agreements as
to the apportionment of liability for the payment of the
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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