In their report Don’t give up your day job: an economic study of professional artists in Australia, the Australia Council for the Arts found that most artists earned less than $7,500 a year from their art despite the great contribution that they and their art makes to Australian society and culture. However, Indigenous art has enjoyed considerable growth in recent years, but unfortunately the Indigenous artists themselves have not shared in this growth. Back in 2002 cultural economist Hans Hoegh-Guldberg was commissioned to scope the value of Indigenous arts and crafts sales in Australia. He estimated that the total value of genuine Indigenous arts and craft sales at $100 million to $120 million a year, and half of these were in sales to overseas visitors. This is obviously good for our balance of trade and good for tourism as people go home with something they are happy with.

Unfortunately, while the value of Indigenous art is improving rapidly, little of the value of the art sales worth hundreds of thousands of dollars, and in some rare cases millions of dollars, is returned to the artist and the communities that created them in the first place. Often with Aborigines and Torres Strait Islanders, their stories and legends and images are collectively owned, but no benefit flows back to the Indigenous owner or the bigger mob that was responsible for the image. I am sure that for anyone with any common sense it does not seem right that a ritzy city auction house should continue to pocket a large cut of the value of Indigenous art for resales while the emerging artist is left with the distant memory in their pocket from the original sale.

In some cases the disparity between the original price and the on-sale price just a few years later can be staggering. For example, in July 1997 a Clifford Possum Japaltjarri painting sold for just $1,200 to some lucky person. Ten years later it sold at auction for $2.4 million, but obviously the painter did not receive a red cent as a result of the appreciation in the value of the painting. If a resale rights scheme was in place it would have ensured that Clifford Possum Japaltjarri would have shared a small percentage of the increased value of the work.

In government, the coalition commissioned the Myer inquiry into contemporary visual arts and crafts. The Myer report, which was released in June 2002, recommended the government introduce a resale rights for visual artists scheme but the Howard government failed to act on the recommendation. Maybe they were getting bad advice at the time, I am not sure. We do not know why, but they failed to act.

The guts of the resale rights for visual artists scheme is contained in another bill before the House and will introduce a far more equitable system that will ensure financial rewards for artists—

No, visual artists, not writers, member for Mayo—for any increase in value when their work is resold. This bill addresses the tax implications of resale royalties. It amends the Income Tax Assessment Act 1997 to regulate the tax treatment for payments made under the resale royalty right for visual artists scheme. It ensures that the resale royalty collecting society, which will be established by this scheme, will not be taxed for royalties it collects on behalf of the artist. Instead, the artist would include any royalty payment in their assessable tax income, thus making Mr Swan happy.

This process mirrors the system in place for copyright payments. Without these amendments, payments handled by the resale royalty collecting society would be subject to complex trust taxation rules. However, this would impact artists as they would become liable for tax on their royalties in the income year they became entitled to them rather than when they actually received the payment. Obviously there can be some delay between those events. The bill also amends the wording of the provisions dealing with the treatment of copyright income to reduce the complexity of the tax law. So it is not legislation that will make the tax lawyers happy, but thankfully they are a small minority.

The resale royalty right for visual artists scheme will ensure that money is directed back to the emerging artists, creating a new way for them to earn income and providing greater incentive for them to stick with their profession. Hopefully, it will mean that some of them will not have to give up their day job and that they will persevere and turn into great artists. Obviously, a lot of people out there in the suburbs are hoping to break into the art world, so hopefully this will give them a little income stream and make them persevere. This bill ensures that the scheme will be complemented by sensible and practical tax laws. I commend the minister for this legislation and I commend the bill to the House.