KEY POINTS:
As a young man, Michael Smither was accustomed to being paid $150 to $400 for his paintings. Now, those same pieces fetch $100,000 or more.
It is perhaps little wonder, therefore, that when selling a painting these days, Smither insists on a contract that guarantees him resale royalties. It is his way of sharing in any commercial profit from his work.
It is also the basis for Government consideration of legislation that would put a royalty payment on artworks when they are resold. All artists, not just those with the fame and reputation of Smither, would have a continued economic interest in the exploitation of their creativity.
A resale royalty right would, first and foremost, recognise the unusual position of visual artists. Writers and musicians, unlike them, do not rely only on the initial sale as a means of benefiting financially from their talent. They gain royalties from the continuing sale and broadcasting of their work.
Since 1920, France has recognised this inequity, and, increasingly, other countries are introducing resale royalties. Their legislation varies only in detail, such as the royalty rate - 5 per cent of the net resale price is suggested for New Zealand - range of work covered, and scope of application. Overseas, it is applied usually only to work sold through auctioneers, dealers or other intermediaries, not that sold privately.
The issue of a discussion paper on the subject will be the signal for predictions of doom for New Zealand's art market. Much of this will be the self-interested utterings of dealers who are happy to extract a 10 to 15 per cent commission from any sale, but claim an added 5 per cent will discourage buying. Their fear is much exaggerated. Michael Smither has found that, speculators aside, the vast majority of buyers will happily sign a contract guaranteeing him resale royalties, once the principle has been explained to them. Overseas experience confirms this. There has been no dramatic slump in art sales in Britain, for example, since the European Union insisted that it introduce resale royalties.
The most cogent objection is that such a right is an unwarranted interference with common law property contracts. These assume ownership and attendant rights transfer in full upon the sale of, say, a house. But this must be balanced against the moral and economic right for artists to be guaranteed a fair return for their work. Copyright rules protect authors from exploitation, as do intellectual property rules in other areas, yet no similar dilution of the law of property applies to New Zealand visual artists.
While the objections to resale royalties are overstated, much the same is probably true of many of the supposed advantages.
It is suggested, for example, that such payment would encourage artists to sell more of their output earlier, rather than holding it back in the expectation that increased fame will eventually garner them a higher price. This, supposedly, would make art more affordable for more people. That seems somewhat fanciful.
Likewise, there is probably limited substance to the view that resale royalties would provide a substantial incentive to fledgling artists. Just as the royalty is unlikely to deter buyers, so it will not, in itself, make artists wealthy.
Nonetheless, the proposal warrants support. It would remedy an odd case of discrimination, and, while rewarding successful artists in the main, would hardly be a disincentive for those struggling to establish themselves.
Only the churlish and the short-sighted would deny them a fair return for their talent.
