Australia's art resale scheme: can it ever be self-sustaining?

From John R. Walker, one of our Australian readers, comes this fascinating and provocative item:

"The Australian government's minister for the Arts, Simon Crean, has just announced an additional $700,000 in public funds to subsidize the operation of the art resale scheme. This brings the total publicly funded commitment to nearly $2.5 million, plus if you add the $1+ million that CAL (appointed collection agency) has allocated, the scheme is rapidly exceeding a cost of $3 million:  so far, it has delivered just $600,000 in payments to artists. The Government statement says:  "As the income from resales increases, it is anticipated the scheme will become self-sustaining." 

 The scheme was premised on a market size and turnover that was, even at the height of the boom, wildly overestimated by a factor of at least 2 or more.  Even a fully retrospective and compulsory scheme such as enacted in the UK, would not be self-funding in Australia; the long term market here is simply not large enough. 

 This government's policies have had a devastating effect on the art market: the resale scheme  has undermined confidence resulting in reduced demand and, at the same time the ruling on SMSF (Self-managed super funds) will result in a massive over-supply of indigenous art for resale on to a reduced market. In this situation, the very idea that a scheme premised on levying on the value of art resales ever becoming even vaguely self-funding is ludicrous. 

 The paradox is that the Australian government has done the resale royalty, at a secondly instrumentation level, as professionally as it could be done and the Act itself reflects the constraints of a constitution that set out very consciously to embody the principles of responsible representative government:  therefore, the Australian scheme is a lawful scheme. However, the messy reality is clear proof that resale royalties, at the level of principle, if done lawfully and properly, are bad policy".

Do you agree with John, or do you take a different view? Do let us know!