A Resale Royalty Right for Visual Artists: Submission Findings

[1] In fact, 203 submissions were received.  One submission, however, was received nearly two  months after the closing date and was not included in the analysis.  

[2] A number of respondents did not answer every question.  Generally, this non-response rate was around 14-19% and applied only to questions beyond the initial indication of overall support or opposition (that is, Question 1). 

Respondents who disagreed with the flat 5% rate said that a fair price had been paid on the first sale and that 5% was excessive, particularly on high value work.  Some respondents preferred the scaled model that applied in the UK and the EU, while others said the rate should be set by voluntary agreement between the relevant parties.  Some asserted that a resale royalty right should only apply if the work increased in value.  They said most art work decreased in value, particularly once other costs (such as insurance, preservation or framing) were taken into account.  They said there should be no royalty if work was sold at a loss, or that artists ought to reimburse the owners in such instances.

Setting a minimum threshold level on qualifying resales

Question 5

Do you agree that a minimum threshold of $500 should be set before a resale price attracted a royalty?

Yes	39%
No	46%
Uncertain/neutral	1%
No answer	14%

n = 202

Respondents who agreed with a threshold of $500 considered that it would assist the viability of a resale royalty scheme.  They said that it would be impractical and costly to collect royalties on sale prices below this amount.  It was asserted that $500 was a fair threshold that would still benefit a wide range of visual artists, including emerging artists.  The amount of $500 was seen as a demarcation between serious, professional art and art that was more likely to be created as a hobby.  It was also seen as an amount that would exclude resales by most secondhand dealers and non-specialist dealers. 

There was some concern that a $500 threshold might skew the market and that art market intermediaries might set the price of work at $499 or less in order to avoid paying a royalty.  There was also concern that certain types of visual artists might miss out as their work tended to sell for less than this amount.  Respondents stated that $500 was a good start but that inflation might undermine a set amount.  They said that the amount should be inflation-adjusted or subject to regular review.

Respondents who disagreed with a threshold of $500 were concerned at the cost of administration relative to the benefits such a threshold might deliver.  They stated that a higher threshold would be more viable, and they proposed threshold amounts ranging from $750 through to $50,000 although most settled on the $1,000-$2,000 range.  They said that a $500 threshold was too low and would unnecessarily capture work sold on internet auctions, in cafes, at school fairs or community/charitable events. 

Respondents also disagreed with a $500 threshold because they wanted it to be lower or because they said it was unnecessary.  They said technology and compulsory collective management by one agency could overcome any administration costs associated with a lower or no threshold.  They said collecting agencies were designed to handle multiple small amounts and could collect lump sums annually to reduce costs.  Respondents considered that the market would effectively set the threshold in terms of what it would be prepared to sell.  They said that there was no threshold on royalties collected for other creators such as composers and writers.  They also said that a threshold created exceptions and that exceptions of any kind enabled loopholes and avoidance.

Setting a cap on the total amount of royalties due

Question 6

Do you agree that no cap should be set on the total amount of royalties due on each resale? 

Yes	60%
No	19%
Uncertain/neutral	5%
No answer	16%

n = 202

Respondents who agreed that there should be no cap said that the value of the resale was irrelevant and that the artist should always benefit fully.  They considered a resale royalty right to be an economic right.  Therefore, they considered it illogical to set a cap and to penalise successful artists whose work attracted higher prices.  Respondents said that a cap discriminated against visual artists generally, and that other creators did not have their royalties capped.  They also said that resale prices were not capped, nor were GST or the charges of art market intermediaries.  Respondents said a cap could complicate a resale royalty scheme, making enforcement more complex and expensive and creating possible market distortions or loopholes.  It was asserted that a cap was only introduced in the EU to prevent art sales diverting to Switzerland and New York whereas, in New Zealand, there was little risk of diversion even to Australia.  It was also asserted that the New Zealand art market was generally of lower value than overseas art markets and that a cap was likely to have a minimal impact given the low number of high value sales. 

Around half of the respondents who said that there should be a cap did not give a specific reason.  Those that did give a reason generally cited their overall opposition to a mandatory resale royalty right.  Some respondents wanted New Zealand to follow the EU and UK model and to implement a cap as well as a sliding scale for the resale royalty rate.  Other respondents stated that an artist whose work gained a high price would already have benefited enough, and that any royalty beyond a capped amount ought to go to artists who were in need of the funds.  There were concerns that, without a cap, the market for high value art could be driven underground or relocate to Australia. 

Liability for payment of a resale royalty

Question 7

Do you agree that there should be joint liability for payment of a resale royalty between the art market intermediary involved in the sale and the seller? 

Yes	49%
No	30%
Uncertain/neutral	2%
No answer	19%

n = 202

Respondents who agreed that liability should be jointly shared between the art market intermediary and the seller said this would strengthen and assist enforcement.  They said that the requirement to pay a resale royalty could be best established and explained at the point of sale, and easily included in sale conditions along with the sale price, buyer’s premium and GST.  It was submitted that joint liability would not allow either party to avoid their obligation, thus creating a mutual interest in compliance.  Respondents said joint liability would also enable an art market intermediary to collect the resale royalty from the seller and pay on their behalf, while at the same time protecting their privacy and security.  Respondents also considered it fair that both seller and intermediary were liable, as both were beneficiaries of the resale.  At the very least, they considered that without the involvement, professional expertise and liability of the art market intermediary, enforcement would be complex, expensive and difficult to administer, and that this might affect the viability of the scheme.  

Those who disagreed that liability should rest with the art market intermediary and the seller considered that the buyer and seller were already charged enough.  They also stated that art market intermediaries were already over-burdened with compliance and should not have to undertake further, uncompensated work. 

Others who disagreed did so because they wanted liability to rest solely on the art market intermediary.  They stated that the intermediary was more knowledgeable of the art business than either the seller or the buyer and already had the business systems set up to enable collection of royalties.  They said this could operate in much the same way as GST in terms of business

records or systems, and in terms of collection at the point of sale.  They said the intermediary could also choose whether to collect the royalty from either the seller or the buyer.  Respondents were concerned, however, that intermediaries might pass on any compliance costs to artists in the form of increased commission rates. 

Exemptions from a resale royalty (on acquisitions by museums and public art institutions)

Question 8

Do you agree that acquisitions by museums and public art institutions should be subject to payment of a resale royalty? 

Yes	56%
No	25%
Uncertain/neutral	2%
No answer	17%

n = 202

Those who agreed museums and public art institutions should be subject to payment of a resale royalty said that there should be no discrimination among those liable, that all resales ought to be treated equally, and that artists should not be penalised on the basis of who sold their work.  Respondents acknowledged the prestige of being in a public collection, but submitted that the institution also benefited from being associated with an important work, as well as being in a position to charge the public to view that work.  Respondents said such institutions paid the seller for the work, paid buyer’s premiums, GST and other copyright royalties.  They questioned why they ought to be able to avoid paying a resale royalty to the artist.  

Respondents noted that museums and public art institutions were large players in the art market and, if they were exempt, this could remove a significant portion of resale royalties, penalising the artist and impacting upon the viability of the scheme.  They also said such institutions tended to hold onto work for longer, thus depriving artists of future resale royalties on that particular work.  They said that to exempt such institutions suggested that there was economic harm in the proposition of resale royalties, in which case all buyers should be exempt.  Respondents said that the best system was one that was consistent, with few exemptions if any.  They also considered that as museums and public art institutions were usually buyers and not sellers, a resale royalty would have minimal impact.

Respondents who wanted museums and public art institutions to be exempt from a resale royalty obligation said that the exposure and prestige of being in a public collection were sufficient reward for an artist.  They considered such institutions were not profit-making enterprises and that their purpose was instead to promote and preserve cultural heritage and to educate.  Some respondents said such institutions were already struggling with inadequate acquisition budgets, and that a resale royalty might hinder the already difficult task of fundraising for acquistions.  They wanted more encouragement for public art collections, and said that a resale royalty exemption could be one way to do this.  Some respondents said that if such institutions were to be liable, it should be at a discounted royalty rate, and that they ought to be encouraged to buy directly off artists, particularly emerging artists. 

Exemptions from a resale royalty (on acquisitions from artists)

Question 9

Do you agree that work purchased directly from an artist should be exempt from a resale royalty on the first resale of that work? 

Yes	38%
No	42%
Uncertain/neutral	3%
No answer	17%

n = 202

Those who agreed that work purchased directly from an artist should be exempt from a resale royalty on the first resale of that work did so because they said such works were usually bought from artists by dealers and were resold within a relatively short period.  They said it would encourage art market intermediaries to buy stock and make an immediate payment to the artist, as opposed to selling the work on commission and paying the artist once the work was sold.  They said it would encourage dealers to buy directly from artists, and that they would be less likely to negotiate the price downwards to compensate for a subsequent resale royalty payment.  Respondents also supported this option as it aligned to international practice.  They were concerned, however, that it might prove difficult to administer. 

Some respondents wanted work purchased directly from an artist to be exempt from a resale royalty on the first resale of that work because they were generally against a resale royalty, and said that all resales ought to be exempt. 

Those opposed to an exemption for the first resale of work bought directly from an artist considered that all resales ought to be treated equally and that the sales source was irrelevant.  They said consistent application of a resale royalty right might change buyer behaviour, might discourage direct sales or might reduce first-sale prices, but they said these were risks artists needed to take.  Respondents considered that consistent treatment of all resales would assist enforcement, and avoid loopholes and possible evasion.  Respondents also

disagreed with the exemption because they considered the buyer was usually able to obtain a discount when buying direct from the artist, and therefore ought to pay a royalty on its subsequent resale, particularly as this resale was likely to be for an enhanced price.

Some respondents who disagreed with the exemption said it could result in individual buyers going directly to artists and avoiding sales sources such as auction houses and dealer galleries.  An exemption was perceived as disadvantaging art market intermediaries and impacting on the viability of their businesses.

Question 9 (continued)

Do you agree that an exemption should only apply if the resale takes place within three years of the work being purchased directly from the artist?

Yes	46%
No	42%
Uncertain/neutral	0%
No answer	12%

n = 76

Respondents who agreed that an exemption should only apply if the first resale took place within three years of the work being purchased directly from the artist said this was both fair to the artist and to the buyer, and that any resale price within that period was unlikely to be much higher than the first-sale price.  They said it could take this long to generate public interest in a work or to generate enough works to present to a client.  Respondents said buyers who sold within this three-year period only did so because they were forced to by personal circumstances, or in order to buy other art work. 

Question 9 (continued)

If you answered no to the previous question, do you think an exemption should apply for longer or shorter than three years?

Longer	40.5%
Shorter	28%
No answer	31.5%

n = 32

Question 9 (continued)

If you think it should be longer or shorter, what would be an appropriate period?

Zero	9.5%
1 year	9.5%
2 years	3%
5 years	3%
10 years	6.5%
20 years	3%
Forever	9.5%
Whenever sold	12.5%
No answer	43.5%

n = 32

Respondents who said the exemption period should be longer than three years were generally opposed to implementing any mandatory resale royalty right.  They said the exemption should last up to whenever the work was resold for the first time, or for a period ranging from 5 years to forever.  Other respondents considered that any time limit was a restriction on the free market.

Respondents who wanted the exemption period to be shorter than three years said the art market could be volatile and that work often resold quickly, particularly among speculators.  Respondents were concerned that an exemption on direct sales could distort the market or be used as a loophole to avoid paying a resale royalty. They were also concerned about the difficulty and cost of tracking a work that was eligible for an exemption.  Should any exemption apply, some respondents wanted it to be for no longer than a year.

Question 9 (continued)

Do you agree that an exemption should only apply provided the work is resold for less than a certain amount? 

Yes	49%
No	30%
Uncertain/neutral	1%
No answer	20%

n = 76

Question 9 (continued)

If you answered yes to the previous question, up to what resale amount should an exemption apply?

$500	11%
$1,000	5.5%
$2,000	3%
$3,000	3%
$5,000	8%
$10,000	11%
Below original price	8.5%
Double original price	8.5%
10% above original cost	3%
Same as threshold	5.5%
No answer	33%

n = 37

Respondents who said an exemption should only apply if the work was resold for less than a certain amount said this would protect a buyer, particularly one that supported emerging artists, should that work later sell at a loss.  Some respondents were concerned that if the exemption amount was set too high, work purchased directly from artists might be marked up to meet this level and later resold for considerably less, thus harming the artist’s reputation. 

Some respondents wanted an exemption to apply if the work resold for less than its original purchase price.  Other respondents wanted the exemption to apply to a level that was up to twice the price of the original sale price.  Some respondents did not give a specific exemption level.  Others gave an exemption level that was identical to the threshold price proposed for the scheme overall (that is, $500) or identical to an alternative threshold level that they had proposed. 

Respondents who did not agree that an exemption should only apply provided the work resold for less than a certain amount said exemptions created inconsistencies and opportunities for avoidance of liability.  They said that this could create enforcement difficulties, and that some overseas resale royalty schemes had been undermined by being based on issues of profit or increases in price.    They also said that the exemption level could distort the market by artificially reducing sale prices in order to qualify.  Respondents said that large price rises within three years were unlikely and that the overall threshold for the scheme could capture those works that did increase significantly in value.

Duration of a resale royalty right

Question 10

Do you agree that resale royalties should be payable to living artists and/or to those entitled under a deceased artist’s estate for as long as copyright exists in that work (that is, “life plus 50 years”)?

Both living and deceased artists	62%
Living artists only	7%
Deceased artists only	1%
Uncertain/neutral	1%
No-one	8%
No answer	21%

n = 202

Respondents considered that resale royalties should be payable on the work of both living and deceased artists because this aligned to international practice and to copyright duration for other creators.  They said visual artists ought to have the same rights as others in the general community and that a resale royalty right was an asset that was part of an artist’s estate and part of their legacy.  They submitted that the issue was not about who might be most deserving of additional funds – the living artist or beneficiaries of a deceased artist’s estate.   Respondents said applying a resale royalty right to the work of both living and deceased artists enabled the artist to acknowledge their supporters, in particular their families who might have struggled economically during an artist’s lifetime.  Respondents said that art work often increased in value upon an artist’s death, and they said that those who supported them during their lifetime should benefit.  They saw this as a way to reward that support and said that it was sometimes the only legacy an artist could leave.  Respondents said all resales ought to be treated consistently.  They also said including the work of both living and deceased artists would assist the viability of a resale royalty scheme in an art market the size of New Zealand’s.  It was asserted that this option reflected the origins of a resale royalty right, which was introduced in 1920 in France with the original aim of taking care of a deceased artist’s dependants.  

Respondents who wanted resale royalties to be payable only to living artists said it should support and recognise the creator, and encourage them to continue working in the sector.  Some respondents said royalties could still be collected on the work of deceased artists but that these royalties ought to go to a fund to support living artists only.  Respondents said it would be difficult and expensive to administer royalties for deceased artists, and to identify and track beneficiaries.

Respondents who said royalties should be payable only on the work of deceased artists said that the value of a work increased upon the artist’s death.  They said that established artists already did well and that working artists could earn an income by continuing to sell their own work.

Respondents who did not want royalties to be payable to either living or deceased artists generally disagreed with a mandatory resale royalty right.  Some respondents, however, said living artists had more right to claim royalties than beneficiaries of deceased artists.  They considered that royalties payable to the estate were a windfall for beneficiaries that did not create the work.

Inalienability of a resale royalty right

Question 11

Do you agree that a resale royalty right should be inalienable and unable to be waived or reassigned and that it apply to the creator regardless of whether or not the creator retains ownership of the copyright? 

Yes	56%
No	20%
Uncertain/neutral	2%
No answer	22%

n = 202

Respondents considered that inalienability best protected the artist and their intellectual property.  They said there was already considerable pressure on younger, emerging artists to relinquish their copyright.  They considered that any inability to retain copyright should not impact upon a resale royalty right, either for works created independently or commissioned.  Respondents said that inalienability guaranteed that the creator of a work would be recognised, rewarded and able to share in the value of any future trade of their work.  They said alienability would defeat the purpose of introducing a resale royalty right.  It was asserted that enabling an artist to waive or reassign their resale royalty right would also complicate and increase the costs of enforcement, in that any waiver or reassignment contracts would need to be tracked and monitored and could result in disputes.  Respondents wanted the scheme to be as simple as possible, with no exceptions or exemptions. 

Some respondents noted that the inalienability of a resale royalty right should extend to an artist’s estate.  Others wanted a limited waiver so that artists who did not wish to receive their royalties could instead opt to assign them to a consolidated artists’ fund. 

Respondents who disagreed that a resale royalty right should be inalienable said that this was contrary to copyright practice, and that contractual autonomy was an important aspect of the legal system.  They said that the resale royalty right should rest with the copyright owner.  Some said that this was particularly so for commissioned work and that the payment of a commission could reflect both the work done and the reassignment of a copyright and, if introduced, a resale royalty right. 

Reciprocal resale royalty rights

Question 12

Do you agree that a resale royalty right should be offered on a reciprocal basis to nationals of countries that have similar schemes and offer reciprocal rights to nationals of New Zealand? 

Yes	59%
No	19%
Uncertain/neutral	4%
No answer	18%

n = 202

Respondents who wanted a resale royalty right to be offered on a reciprocal basis to nationals of countries that have similar schemes and offer reciprocal rights to nationals of New Zealand said it was about recognising the rights of creators of original work.  They said it was not about the country of origin of that work, and that intellectual property protection should not have borders.  They also asserted that reciprocity was a central tenet of international agreements such as the Berne Convention for the Protection of Literary and Artistic Works and the World Trade Organisation’s Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), and that copyright agencies had reciprocal collection agreements with their international counterparts which could easily enable widespread royalty collection.  Other respondents said that artists lived in a global economy and had no control over the location of their work once sold.  They said reciprocity was likely to have a minimal impact and might tend to benefit New Zealand artists more than overseas artists.  They wanted all resales to be treated consistently and said that a simple and straightforward scheme would assist in compliance and avoid loopholes and market relocation.  There were some concerns, however, about the possible cost of administering the resale royalty rights of overseas artists.

Respondents who disagreed with reciprocity were also concerned with administration costs.  They questioned its effectiveness and said it would be too expensive to track foreign artists and beneficiaries.  Some respondents highlighted the countries that did not have resale royalty schemes and said that New Zealand should not always link itself to Europe or the UK.  They submitted that there would be little benefit from reciprocity, particularly as Australia did not have a resale royalty right scheme.  Respondents said a reciprocal resale royalty right would depress the art market and discourage overseas collectors from buying New Zealand art.

Resale royalty collection and distribution - Compulsory collective management

Question 13

Do you agree that a resale royalty right scheme should employ a compulsory collective management system? 

Yes	65%
No	14%
Uncertain/neutral	2%
No answer	19%

n = 202

Respondents who wanted compulsory collective management said this would be the most effective and accountable system of enforcement.  They said this type of scheme would have national authority and the ability and resources to follow up on non-payment.  Respondents considered that this would better protect artists’ interests and avoid pressure on particular individuals, leaving artists to focus on their work and not on chasing royalties.  It was also seen as protecting the privacy of collectors.  Respondents said a non-compulsory system was in fact a voluntary system and that voluntary resale royalty arrangements did not work.   Compulsory collective management was seen as administratively simple, consistent in its application and able to reduce the workload of art market intermediaries by limiting the royalty requests to a collection agency or agencies rather than to numerous individual artists or their agents.  Some respondents said that the ability to develop a register of art work might be a secondary benefit of compulsory collective management.  It was considered that this could provide valuable information on works sold, their location, and artist exhibitions and operations in New Zealand.

Respondents who agreed with compulsory collective management expressed concern about administration costs and the possibility these might absorb the royalties.  Those who disagreed with compulsory collective management were also concerned about administration costs and about the costs outweighing the benefits.  Administration cost was also a concern of those who were uncertain or neutral about compulsory collective management. 
Respondents who disagreed with compulsory collective management said that the scheme should fund its own administration costs and should not use any taxpayer funds.   Some respondents questioned whether enforcement could be effective, particularly in relation to internet or garage sales.  There was also concern that a resale royalty right was regressive, in that buyers would have bought art work prior to knowing it would be subject to a resale royalty payment once resold.   

Resale royalty collection and distribution – Number of agencies

Question 14

Do you agree that the collection of resale royalties should be administered by one agency? 

Yes	57%
No	20%
Uncertain/neutral	3%
No answer	20%

n = 202

Question 14 (continued)

If you answered no to the previous question, how many agencies should be able to collect resale royalties? 

Two	5%
Three	2.5%
Several	5.5%
Unlimited	2.5%
No-one	5%
No answer	79.5%

n = 39

Respondents who agreed that the collection of resale royalties should be administered by one agency said the New Zealand art market was too small to sustain any more than one agency; some said that it may be too small to sustain even that.  Respondents said that one agency would be cost-effective, whereas multiple agencies would drive costs up and benefits down.  Some respondents were concerned about one agency having a monopoly.  They were concerned about accountability and wanted to cap the commission rate that the collection agency was able to deduct from artists’ royalties to cover administration costs.  Respondents also wanted the collection agency to be New Zealand-based and to have a strong knowledge of the New Zealand regulatory environment.  Respondents said that one agency would be simpler and provide one point of contact.  They said this would make enforcement and compliance more effective and reduce any confusion or potential for avoidance and loopholes.  Respondents stated one agency would also provide consistent interpretation of the scheme’s parameters.  Respondents pointed to the Australasian Performing Right Association (APRA) in terms of a model or organisation they said was worth emulating.

Respondents who disagreed with one agency administering resale royalties submitted that competition would keep costs down, meaning lower commission rates and higher resale royalties.  They said a monopoly was unhealthy for artists and they pointed to the UK where the introduction of a second agency resulted in the first agency lowering its commission rates.  Respondents stated that artists ought to be able to choose their own agency and that various organisations representing different sectors of visual art might be appropriate.  Other respondents were opposed to a mandatory resale royalty right and did not want any agency to administer it.  Some respondents said the scheme would be so bureaucratic and difficult to administer that it would require dozens of agencies to monitor it effectively.

Respondents who were uncertain or neutral about the number of agencies were concerned about administration costs outweighing the benefits.  They
said that cost-effectiveness and viability ought to determine this decision. 

Most respondents who disagreed with there being one agency, or who were uncertain or neutral, did not specify an alternative preferred number.  A few respondents said no-one should administer resale royalties, while others opted for two or three agencies through to an unlimited number. 

Question 14 (continued)

Which type of agency do you think may be the most appropriate to administer the collection of resale royalties?

Government agency	32% [ 3]
Statutory body	21%
NGO	22%
No-one	13%
No answer	27%

n = 202

Respondents who chose a government agency as the most appropriate body to administer the collection of resale royalties said it would be transparent, accountable, trustworthy and able to handle any conflicts of interest.  They said that a private company might struggle with the scheme’s viability, whereas the government had existing capacity and access to resources such as legal advice or additional support if necessary.  Respondents said that a government agency would give the scheme authority and credibility nationally and internationally, which would aid effective enforcement.  Some respondents said a government agency’s involvement might enable some cross-over and         co-ordination between the collection of GST and the collection of resale royalties.

Respondents who said a statutory body would be the appropriate agency to administer resale royalty collection stated that neutrality was important.  They said the organisation should be independent of government and of private sector interests such as art market intermediaries.  Respondents said there ought to be a connection to government, in terms of legal authority, setting of operational guidelines, accountability and review, and that there ought to be a disputes mechanism. 

Respondents who favoured a non-government organisation said independence was a key consideration.  They said copyright collection agencies tended to be independent, not-for-profit agencies that were free of bureaucracy and political pressure or intervention, and that they already existed specifically to undertake such a role.  Respondents said the most appropriate collection agency was one that was able to be impartial, and able to gain the confidence of artists and art market intermediaries.  They said the government was a significant art collector and could have a conflict of interest.  Respondents also wanted the agency to have an arts focus and existing knowledge of the arts, and pointed to APRA as an appropriate model. 

Respondents who chose more than one option as the most appropriate agency to administer resale royalties cited reasons of accountability, to the public as well as to artists.  They stated that government involvement might result in a stable commission rate and that the government might subsidise administration costs.  They wanted the agency to be New Zealand-based, representative of the arts community, have artists’ interests at the forefront and have a secure infrastructure.  

Respondents who did not consider any agency appropriate to administer the collection of resale royalties were generally against a mandatory resale royalty right.  They said it would benefit only established artists and artists’ estates.  They said compliance would be impossible and that administration costs would outweigh the benefits.     

Question 14 (continued)

Do you have any specific agency or agencies in mind that you think may be the most appropriate to administer the collection of resale royalties?

Australasian Performing Right Association	1% [4 ]
Artists Alliance	14%
Creative New Zealand	13%
Contemporary Fine Art Dealers’ Association	1%
Copyright Licensing Ltd	2.5%
Designers Institute of New Zealand	1%
Inland Revenue	15.5%
Ministry for Culture and Heritage	14%
Museums Aotearoa	1%
National Library	1%
Viscopy	21%
Copyright agency	10.5%
Government agency	8.5%
New agency	7%
No-one	9.5%
Other	22%

n = 83

Respondents were asked to indicate any specific agency or agencies that they considered might be the most appropriate to administer the collection of resale royalties.  A total of 58% respondents did not answer this question.  This non-response was evenly divided between those who generally supported a mandatory resale royalty right but did not have a specific preference for the type of collection agency and those who were opposed to a resale royalty right and therefore did not consider it necessary to name a specific agency. 

Out of those 42% who did respond, 21% chose Viscopy as the most appropriate agency, 15.5% Inland Revenue, 14% the Ministry for Culture and Heritage, 14% Artists Alliance and 13% Creative New Zealand [5].  Other agencies specifically mentioned (by one or a few respondents) included Copyright Licensing Ltd, Australasian Performing Right Association, Museums Aotearoa, Designers Institute of New Zealand, National Library, Contemporary Fine Art Dealers’ Association, Elam School of Fine Arts, and Whitecliffe College of Arts and Design. 

A total of 8.5% of those who responded to this question indicated a government agency but did not specify which one, while 10.5% said it should be a copyright agency (unspecified), 7% wanted it to be a new agency, and 9.5% said it should be no agency. 

A total of 22% of respondents did not indicate a preferred agency or type of agency but requested a transparent process of selection based on specific criteria.  While some respondents indicated a preference for an arts-focussed organisation, they said that ultimately the most efficient agency ought to be

selected.   Some respondents wanted artist input into the selection process, including the involvement of Artists Alliance.  Other respondents specifically referred to APRA and wanted a similar model to be set up for visual artists. 

Enabling legislation

Question 15

Do you agree that a resale royalty right in New Zealand should be established by amendment to the Copyright Act 1994?

Yes	53%
No	20%
Uncertain/neutral	5%
No answer	22%

n = 202

Respondents who agreed that a resale royalty right in New Zealand should be established by amendment to the Copyright Act 1994 said this was logical, as a resale royalty right was a copyright issue and all copyright matters should be in the same legislation.  They said this aligned to international practice, and cited copyright agreements such as the Berne Convention for the Protection of Literary and Artistic Works.  Respondents asserted its inclusion in existing legislation was simpler than separate legislation and would add weight to its effectiveness.  There was also a request for this legislation to include the right to seek information from particular parties to ensure enforcement.  Respondents expressed concern that the alternative of a voluntary (unlegislated) resale royalty agreement did not work.  Some respondents also wanted other parts of the Act to be amended at the same time, such as extending the copyright duration for artistic works (from 50 years to 70 years after the death of the artist) and strengthening protection for artists (particularly sculptors and installation artists) whose work was photographed and marketed without acknowledgment or the artists’ permission.

Respondents who disagreed with its inclusion in the Copyright Act said a resale royalty right was not a copyright but a property right.  They said that the scheme was not viable in New Zealand and would benefit few artists.  Other respondents said it should be a separate piece of legislation, and that this would be simpler and would distinguish between resale royalty rights and copyright. There was concern that it was already difficult enough to enforce copyright and that artists might not benefit from resale royalties either.  Some respondents said they did not know enough about copyright to answer.  Few respondents provided an alternative, other than to say they either preferred the status quo or that there should be separate legislation.

General comment

Question 16

Are there any other comments and/or evidence you wish to provide in support of your submission?

Respondents were invited to offer other comments and/or evidence in support of their submission.  Most respondents tended to reiterate their overall position on the proposed introduction of a mandatory resale royalty right. 

Respondents who supported the introduction of this right pointed to the UK - the level of resale royalties collected and the apparently minimal impact the introduction of a resale royalty right has had on the art market.  They said voluntary resale royalty agreements had limited value, that visual artists needed additional assistance, and that resales currently disproportionately benefited art market intermediaries to the detriment of the artist.  Respondents wanted visual artists to have comparable opportunities as other artists to derive royalties from their work and they wanted protection of visual artists’ intellectual property.  They said that New Zealand’s adoption of a resale royalty right would be an important indication, nationally and internationally, of this country’s respect for visual artists.  The right would also provide an incentive for artists to create work and to build a sustainable career. 

Concern about the administration costs of a resale royalty scheme was expressed, as was concern that art market intermediaries might increase the commission they charged artists on the first sale of their work.  Respondents wanted a scheme to be as simple as possible, to limit any potential for avoidance.  Simplicity and consistency in application were seen as assisting compliance and viability.  Some respondents were concerned that internet auctions and private sales might provide possible loopholes.

Respondents who did not support a mandatory resale royalty right said it would be unfair and penalise small businesses and art collectors.  They said a fair first-sale price had been agreed on the work and that a resale royalty right would interfere with an owner’s property rights.  Some respondents said artists were being greedy by wanting an additional share of any resale price.  Respondents said that a resale royalty right would depress the art market, reducing both first-sale and resale prices.  They said the scheme would be bureaucratic, difficult to enforce and of little benefit to most artists.  Some respondents said that the government should either keep the status quo, reconsider the scheme when the art market was larger, or consider alternative ways to support visual artists.  Other respondents said that artists who could not make a living from their work ought to consider another occupation.

Some respondents suggested other options to support visual artists, either instead of, or in addition to, a resale royalty right scheme.  These suggestions included tax incentives for art collectors as a means of encouraging them to buy art and support visual artists, particularly emerging artists; and tax incentives to encourage art collectors to sell or donate works of art to museums and public art institutions.  There were suggestions of reduced taxes for artists, including the removal of GST on materials used by artists in the creation of their work; and the removal of income tax for visual artists. 

It was suggested that a register of art works be developed, in conjunction with compulsory collective management of resale royalties.  Respondents asserted that the collection of information necessary to secure payment of royalties could also provide valuable information for artists, historians and curators on the works sold, their location, and artist exhibitions and operations in New Zealand. 

Other suggestions included:

• additional funding for Creative New Zealand or for initiatives such as: supporting galleries to promote artists in New Zealand and internationally; the provision of venues and exhibition opportunities for emerging artists; targeted study grants for visual artists; assistance to pay off artists’ student loans; and targeted support for emerging artists and those on low incomes;
• an art acquisition budget for all government departments;
• compensation for visual artists whose works are held in public collections;
• encouragement and legal assistance for artists to draw up effective voluntary resale royalty contracts and/or to encourage artists to retain copyright;
• amending the Copyright Act 1994 by extending the copyright period from 50 years to 70 years after the death of the creator;
• amending section 73 of the Act to strengthen protection for artists (particularly sculptors and installation artists) whose public work was photographed and marketed by others for commercial gain, without the acknowledgement or permission of the original artist; and
• strengthening New Zealand’s moral right provisions by declaring them to be incapable of waiver and/or removing the requirement that they must be asserted.

Appendix: 1 Distribution of discussion papers

Over 3000 discussion papers were distributed as shown below:

Sector	Number of discussion papers distributed [6]
Artists and arts groups	1035
Secondhand dealers	1100 [7]
Dealer galleries	393
Museums	149
Auction houses	9
Academics	63
Curators	34
Government agencies and statutory bodies	149
Iwi	86
Other [8]	142
Total	3160

Appendix 2: Overall position – by sector

Sector	Support	Neutral or uncertain	Oppose	Total
Artists	93	2	12	107
Collectors/buyers/sellers	4	1	18	23
Secondhand dealers	1	1	15	17
Dealer galleries	5	-	11	16
Copyright collection agencies	7	-	-	7
Arts groups (eg advocacy, artist space)	6	-	-	6
Museums/art institutions	5	-	1	6
Auction houses	-	-	4	4
Academics	1	1	1	3
Other	4	1	8	13
	126 (62%)	6 (3%)	70 (35%)	202

Appendix 3: Respondents

The following respondents made submissions in response to a discussion paper on the proposed establishment of a mandatory resale royalty right in
New Zealand:

First Name	Surname	Organisation (if any)
Ken	Adams
Jim	Allen
Melissa	Anderson Scott
Marilyn	Andrews
Kwee Tiang	Ang	CISAC (International Confederation of Societies of Authors and Composers)
Brian	Badcock
Allan	Baggett
Dianne D	Baker
Peter	Barker
Neville	Bates
Elspeth	Batt
Suzanne	Beer	Lewis Paape Gallery
Heather	Bell
Mark	Berry	Barristers.Comm
F	Bills	Art Works
Don	Binney
Evan	Blair	Evan's Antiques
Judy	Blanchard
Jonathan	Booth
Tony	Borick
Jamie	Boynton
Graham	Brinsley
Lyndsay	Brock
Julia	Brooke-White
Bryce	Brown
Warwick	Brown
Ellen	Butland
Neil	Campbell
Alby	Carter
Paul	Cash	Aotearoa International Ltd
Paul	Cato
Susan	Chambers
Greg	Cole
Jenny	Collins
Meredith	Collins
Sue	Collins
Hamish	Coney	Art and Object
Des	Cotman	Far North Regional Museum
Sarah	Cragg
Douglas	Crane
J B	Cunnington
Lyn	Dallison
Rick	Davies
Alex	Davis
T	Delamore
Louise	Dentice
Jon	Dobbs
Sarah	Dugdale	North Shore City Council
Terry	Duthie
Lorraine	Elliott
Hilary	Falconer	Arts Waikato
Charlotte	Fisher
Aaron	Frater
Dick	Frizzell
Helen	Frost
Clive	Fugill	Te Puia
Viky	Garden
Mike	Geers	PassionArt
Jenny	Gibbs
Max	Gimblett
Sam	Gisler
David	Goodwin
Fiona	Goulding
John	Gow	John Leech Gallery
Mark	Graver	Wharepuke Print Studio
Anthony (Tony)	Green
Maggie	Gresson	Artists Alliance
Russell	Haley
Gillian	Hanley
Megan	Hansen-Knarhoi
Janet	Hart
Lloyd	Harwood
James and Susan	Hassall
Anthony	Healey	APRA (Australasian Performing Right Association)
Ross	Hemera
Warwick	Henderson	Warwick Henderson Gallery
John	Hoggard
Linda	Holloway
Derek	Hooper
Heather	Horngate
Ralph	Hotere
Jan	Huijbers
Daniella	Hulme
Alexis	Hunter
Peter	Jarvis	Ferner Galleries
Christina	Jeffery	Tautai Contemporary Pacific Arts Trust
Stephanie	Johnstone
Rosalie	Jurczenko
Jodi Ruth	Keet
Hamish	Keith
Merrilee	Kessler	NAVA (National Association for the Visual Arts)
Aaron	Key	Advertising and Illustrative Photographers Assn
Cheryl	Kinder
Errol	King
Rangi	Kipa
Lindsey	Kirk
David	Langman	NZ Centre for Photography
Gary	Langsford	Gow Langsford Gallery
Margaret	Lawlor-Bartlett
Mark	Lindsay	Creative New Zealand
Antonia	Marino	NZ Art Guild
Liz	McAuliffe-Evans
Ewen	McCann
Kerry	McCarthy	Canterbury Museum
Michael	McCormack
G'ian	McGregor
Ray	McKeown
Mark	McLaughlin
Heather	McLeod
Annie	Melchior
Alfred	Memelink
Peter	Merrick
Judy	Millar
Marian	Minson	Alexander Turnbull Library
Bryce	Moller	Art Attack
Ansley	Moore
Tuakana	Morgan
Vivienne	Morrell
Bob	Munro	Salamander Gallery
Alison	Murray
Jenny	Nelligan	Bowen Galleries Ltd
Susan	Nelson
Peter	Nicholls
Maris	O'Rourke
Penny	Otto Kellock
Marcia	Page	Tinakori Gallery Ltd
Neil	Pardington
David	Peautolu
Gerhard	Pfennig	Bild Kunst
Priscilla	Pitts	Dunedin Public Art Gallery
Karen	Prall
Helen	Prentice	Casa Manana
John	Radford
A G	Rangi
L	Robbins
Simon	Robinson
Sandy	Rodgers
Zoe	Rodriguez	Copyright Agency Limited
Alan	Ross
Chris	Saines	Auckland Art Gallery
John	Sargeant
Dorothy	Saunders
Walter	Scott
Peter	Shand	Elam School of Fine Arts
Susan	Shand	Art Bureau NZ Ltd
Ashley	Shaw
Ken	Sheldrick
Peter	Siddell
Gary	Simmons
Alexandra	Sims	Department of Commercial Law, University of Auckland
Rae-ann	Sinclair
Dunbar	Sloane Snr	Dunbar Sloane Ltd
Michael	Smither
Michael	Smythe	CREATIONZ Consultants
Alan	Sorrell
Jacqueline	Spencer
Tania	Spriggens	DACS (Design and Artists Copyright Society)
David	Stone
Craig	Swift
Graeme	Sydney
Allan	Tattersfield
Lorraine	Taylor
Kura	Te Waru-Rewiri
Derek	Thode	Toi Ora Live Arts
Elizabeth	Thomas
Beryl	Thomson
John	Timoti-Hohaia	Hato Paora Co-op Ltd/Ngati Kahu Ki Whangaroa Co-op Soc Ltd
Chryssy	Tintner	Viscopy
Christine	Turner	Trade Me
Dee	Twiss
Greer	Twiss
Ann	Uerata
Robert	van de Voort	Albany Studios
Rae	van't Hof
Carmen	Vietri	Copyright Licensing Ltd
Gregory	Waite	Antiques on Main
Sharen	Watson
Richard	Watt	Department of Economics, University of Canterbury
R	Watts
Peter	Webb	Webbs Fine Art
Jim	Wheeler
Andrew	White
Deborah	White	Whitespace
Yuri	Wierda
Grant	Williams
Haley	Williams
Nigel	Williams
Janet	Williamson
GE	Wrigley
Collette	(no name given)
Ingrid	(no name given)
Lee	(no name given)	Artbash
Sally	(no name given)
Tracey	(no name given)	House of Taonga
Megan	(no name given)
(no name given)	(no name given)
(no name given)	(no name given)
(no name given)	(no name given)
(no name given)	(no name given)
(no name given)	(no name given)
(no name given)	(no name given)
(no name given)	(no name given)
(no name given)	(no name given)

Page last updated: May 13, 2008

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