"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".