The second, nearly six months later, was an artist focus from Valerie Kabov’s “Why art?” email newsletter extolling mid-career (but absent from the secondary market) geometric abstract painter John Aslanidis as a “good artist” worthy of collecting.
In many ways these events formed a pair of book-ends for 2010 in a year when it was hard to remember that the art market in Australia has always contained what may be described as a dichotomy of the money and the magic. But even in saying that, 2010 was an extraordinary year.
Between Cooper and Aslanidis lay the introduction of resale royalties, the Commercial Code of Conduct for the Aboriginal art market, the first serious satellite event to accompany the Melbourne Art Fair, controversies over fakes , forgeries and appropriations, the collapse of Smith and Hall and ongoing skirmishes in Brisbane between graffiti reduction squads and street artists!
At times this year it seemed as though the art market itself was under attack. This was particularly disappointing when the new year held such optimism following the success of the investment allowance provisions in the second half of 2009 which was of great assistance to many galleries and artists and ameliorated concerns over the forthcoming resale royalty scheme.
Amongst others I thought the art investment allowance (as many in the industry called it) was worth engaging with the Federal Arts Ministry to investigate more permanent taxation incentives.
Instead, the Federal Finance Ministry came up with a reverse taxation incentive several months later, when the Cooper Review, paneled mainly by the large APRA funds, recommended that art was not a valid investment class (except for APRA funds) and therefore small self-managed super funds should be prohibited from investing in the art market.
The Cooper Panel went even further by proposing to have all artworks held in self-managed super funds divested within a ten year period. Little more than two months later this divestment period was reduced to 5 years provoking fury and allying artists and art market professionals through the Save Super Art campaign in a way not previously imaginable.
It struck many in the industry as strange that during the same period, the resale royalties scheme was being marketed as proof of the validity of art as an investment class (every example in the explanations section of the legislation showed investors making profits from their artwork purchases!) Jeremy Cooper was making comments to the press such as “I look at the art market and I think it’s got a long way to go before it’s legitimate”.
The Federal Arts Ministry remained mute during this brouhaha until mercifully in late July, a week out from the Melbourne Art Fair and in the midst of an election campaign, the Gillard Government struck out the Cooper proposals with the proviso that better guidelines for holding artworks in super funds be adopted.
To cap off a plot worthy of a David Lynch film, until this month this was the only recommendation from the entire 150 or so Cooper proposals to have been ruled out to date, even though apparently artworks and collectables comprise only 0.1% of assets held in self-managed super funds.
Providing a postscript to the Cooper debacle was the collapse of Smith and Hall, Sydney in October, which reportedly involved 800 artworks with a total value estimated in the millions. Formerly known as Galleries Direct, Smith and Hall pursued a business model with a focus on attracting self-managed super funds to invest in the art market by guaranteeing leasing income through the hiring out of artworks.
In other words Smith and Hall sought to exploit the “sole purpose test” in which super funds could not display artworks in the premises of their members by having those artworks exhibited on an arms-length basis, and at the same time securing a return on the investment through the rental of the artworks (which it guaranteed regardless of the actual rental being paid).
As art market commentator Jane Raffan commented: “The Smith and Hall model…appeals to ‘art lovers’ because the rewards wrap pleasure and profit together in an emotionally satisfying bundle.” The collapse of Smith and Hall following the Cooper debacle became the dead canary in the art market coalmine, and a warning that a slavish devotion to regulation combined with fashion should never be at the expense of fundamentals like knowledge, appreciation and valuation skills.
Because of the above it seems the Cooper Report has created uncertainty and mayhem in terms of super fund compliance. The Smart Investor magazine reported in September, a month after the recommendations were overturned, that “key recommendations for the DIY sector” include a “ban on collectables and personal use assets”.
It has become clear that the arts industry has to engage further with the associations whose members prepare and audit super fund financial statements and provide financial advice to super fund members - and demonstrate that it can enforce the fundamentals behind providing sound advice in artwork acquisition.
One of the major challenges in terms of this engagement will be convincing such associations that the art industry has minimum standards of professional behavior. This will be no easy task if the public continue to hear horror stories concerning fakes and forgeries. Significantly the case of Blackman v Gant, heard in the Victorian Supreme Court this year has provided important precedents for holding art market professionals to account.
Prominent artists Charles Blackman and Robert Dickerson took Melbourne art dealer Peter Gant to court over an alleged breach of Section 9 of the Fair Trading Act (Victoria) – in essence the complaint was that Gant had knowingly engaged in deceptive behavior by selling works purportedly by the artists that he knew were in fact fakes.
Justice Vickery could not rule that Gant had prior knowledge the artworks were not right but he ordered an injunction to prevent the dealer from selling them, and ordered they be delivered back to the artists. In mid-July the artists celebrated the return of the fake artworks by burning them in a ritual ceremony held at Dickerson Gallery, Sydney.
According to Blackman scholar Walter Granek: “Justice Vickery considered the addition of signatures on the drawings in the names of the artists to have no other purpose but an intent to deceive. Considered forgeries he ruled that the works had to be destroyed in order to stop the works from being traded again”.
This is a landmark case for the industry with attributed works being ruled as fakes and fake works being destroyed. For art market professionals, providing a valuation now implies ascertaining the authenticity of an artwork. Hence a valuer is now legally liable for that work's authenticity. Breaches of the fair trading act now carry serious legal ramifications. Breaches of an artist's moral rights and copyright is a breach of the law and also has serious implications.
Confusing this situation in the public mind this year was the Wynne Prize awarded to Melbourne artist Sam Leach for his work “Proposal for landscaped cosmos”, a painting that bears more than a passing resemblance to a work by seventeenth-century Dutch artist Adam Pynacker.
According to Leach it was a deliberate act of appropriation, paying homage to a landscape that brought back memories of his Adelaide Hills childhood. According to others it was a deliberate act of copying and the resulting media frenzy gave the Art Gallery of New South Wales trustees pause to reconsider their decision to award the prize to the artist.
In my opinion there would have been no story if the prize had not carried a $25,000 purse. Ultimately the story illustrated the willingness of the Australian mainstream media to go on a culture-bashing expedition to sell papers and airtime; which has been made easier for them to do through the lack of serious government support for the visual arts industry. Sam Leach was more circumspect about the affair, telling ABC Radio “…in a funny way it’s encouraging to know that painting inspires a lot of passion in people.” Quite so!
Leach had more reason to celebrate in August with the launch of NotFair, a satellite event to the Melbourne Art Fair he curated with fellow artist Tony Lloyd and arts writer Ashley Crawford.
Held in a sparse converted warehouse (provided courtesy of Jeremy Kibel who relocated Block Projects to the building after the event) Ali Harper, editor of Art Market Report, commented that it “resembled more of an art space than a fair”.
In fairness – pardon the pun - NotFair garnered a respectable amount of media coverage and high hopes for an expanded Mark II in 2012 that might see it compared favourably to international satellite fairs such as Pulse, Scope, Bridge, Volta and Liste.
The resale royalty scheme has now been operational for 6 months. According to Copyright Agency Limited (CAL), the administrators of the scheme, there have been 335 eligible resales in this period and $47,000 has been paid or is now payable to artists. If these royalties have been paid at the full 5% rate this means $940,000 in resales have been reported to CAL during this period. To put this figure in context it is equivalent to about 2% of the turnover of the Australian secondary market.
Feedback from the art market about the resale royalty scheme is consistently negative, particularly the requirement to report all resales regardless of whether any royalties are payable.
There is a general consensus that not enough has been done in terms of an education campaign – which has actually been picked up by The Greens with their policy of implementing a $5 million arts industry assistance scheme at the expense of removing the first sale exemption under the legislation. ie every eligible sale of an artwork in the country would carry a 5% resale royalty levy under this proposal.
At the time of writing it also appears that no treaties have been entered into with jurisdictions that also have resale royalty schemes.
This may have the consequence of creating inadvertent exemptions for the sale of Australian artworks overseas. It is hard to blame CAL for these disappointments – based on the above statistics they would have earned $4,700 in fees from their administration of the scheme in its first 6 months!
One of the other interesting statistics from CAL is that 82% of the reported resales since June have been for Aboriginal artworks. This is a worrying set of numbers when you consider that as opposed to the overall art market the equivalent of more than 10% of the turnover of the secondary market for Aboriginal artworks is being reported already.
This completes a sorry year in which it appears the Aboriginal art market may be in some sort of decline despite the introduction of the resale royalties scheme as well as the Commercial Code of Conduct.
The latter voluntary scheme, like resale royalties, is suffering from a serious lack of informed debate as to its merits in the market; tellingly none of the major auction houses have signed up to the Code since it became open for business nine months ago. It has not even succeeded in informing the general public about the significance of Code Certificates in the trade of Aboriginal work. What will happen to the Code when it is reviewed in 2012 is anyone’s guess based on its lukewarm reception in its first year of operation.
The above discussion reveals why I was so delighted to receive Valerie Kabov’s review of John Aslanidis in October – here was a critic willing to give a wrap to an artist for his skills regardless of the fact that none of his works have yet to appear on the secondary market. It is worthwhile reproducing key parts of the introduction to her article.
Good artist. There are not that many but more than you would imagine and rarely are they the people who court the limelight. They work hard at their practice and their careers more of following their vision rather than their ego. These artists may or may not have public acclaim and may or may not be market favourites but they always have the respect of their peers and colleagues. John Aslanidis – good artist. Really good artist.
(Why Art? October 2010 newsletter)
Before signing off for the year I have included a non-exhaustive list of prominent artists and art market professionals who passed away in 2010. The past year also saw the closure of galleries such as Hogarth in Sydney, Alison Kelly in Melbourne and Bundarra Gallery in Port Douglas, prominent in the promotion of Aboriginal art; as well as Kaliman Gallery and Harris Courtin, both of Sydney. Thanks to the National Gallery of Australia and Susan McCullough in compiling this information.
OBITUARIES 2010
Jimmy Baker Artist
Tom Bass Sculptor
Peter Blizzard Sculptor
Eva Breuer Art gallery director
John Bulun Bulun Artist
Jeff Carter Photographer
Pamela Challis Artist
Lindsay Churchland Artist
Mari Funaki Jeweller
Jacky Giles Artist
Shaw Hendry Artist
Weaver Jack Artist
Greeny Purvis Kemarre Artist
Jasper Legge Art gallery director
Cath McCullough Sales manager, Art Almanac
Janice McCullough Founding editor, Art Almanac
Anne Newell Artist
Vic O’Connor Painter
John Armstrong Ogburn Artist
Don Peebles Painter
Shane Pickett Artist
June Walkutjukurr Richards Artist
Tom Risley Artist
Wingu Tingima Artist
Beryl Whiteley Benefactor
