Dealers hang art levy out to dry

EIGHT days before it takes effect, the federal government's art resale royalty scheme has been branded a "catastrophe", with gallery owners angry and uncertain about how it will affect their business.

One respected industry figure has told The Australian that a poorly conceived idea is being rushed into existence: "It's a catastrophe. It's a total scramble. It's the resources tax and the pink batts visited small."

Melbourne art dealer Charles Nodrum said the introduction of the GST was nothing compared with the burden he was about to endure. Although he supports the royalty in principle, he is frustrated at the lack of detail about its implementation.

"I was in favour of a resale royalty of sorts, but I would have been struggling to have cooked up a worse one than this," he said.

The royalty, part of Labor's arts policy at the 2007 election, comes into effect on June 9.

After that date, artists and their estates will be entitled to a 5 per cent royalty when their works are resold for more than $1000 in Australia.

Last month, Arts Minister Peter Garrett appointed Copyright Agency Limited to manage the scheme

But commercial galleries across the nation are anxiously preparing for the start of a scheme they only barely understand. Some believe prices will drop, and many insist that not enough information has been provided about the industry's biggest shake-up for years.

Mr Nodrum said he was opposed to handing over all sales information to CAL, saying price details should be confidential.

Prominent gallery owner Stuart Purves said: "In principle, I agree with any help that can be given to the art world, but it's actually detrimental if it's not thought through like this."

A spokesman for Mr Garrett said the royalty gave artists the same rights that authors, musicians and others have had for decades. "The scheme . . . only applies to secondary sales, and gallery operators have had ample time to get accounting procedures in place," he said.

CAL's policy director, Libby Baulch, said a detailed and flexible reporting mechanism was being developed in consultation with the industry.

"I understand that people are wary of something which is new," she said. "I think the fears won't be justified once the thing comes into force."

Arts accountant Tom Lowenstein said small galleries did not have systems in place to handle the changes, which were creating further uncertainty after a recent review recommended a ban on self-managed super funds investing in art.