Lowensteins: Election 2019 Arts Policy
Image: Dale Hickey show, Niagara Galleries, February 2019
Lowensteins: Election 2019 Arts Policy
Open letter to the leaders of all major political parties
Dear Scott, Bill and Richard,
Over the past decade, following the Global Financial Crisis of 2007/8, we have seen the primary art market and the Indigenous art market collapse in Australia, resulting in numerous galleries closing and artists’ incomes reducing drastically.
It is not only the individual artists whose income has been affected but all ancillary services to the arts, such as arts suppliers, framers, freight and shipping agents, advertisers, magazine publishers, galleries, dealers and consultants and similar ‘small businesses’.
This economic decline in the visual arts sector has resulted in a substantial number of artists having to rely on Centrelink benefits to meet their needs.
Over the past five years we have seen the international art market recover and, at times, even soar to new heights, as a reminder to us that there is money available for good investments in art.
Yet, despite these positive aspects in the international art market, the Australian art market is still to a large extent languishing and unable to achieve a sustained recovery.
It is our view that a significant cause of this malaise has been the introduction of New Regulations affecting the ability of Self-Managed Superannuation Funds (SMSFs) acquiring art as an investment. These Regulations have placed onerous conditions on storage, insurance, and administrative requirements, making it virtually impossible for advisers to recommend the acquisition of art and collectibles to trustees of SMSFs.
The only result of the New Regulations has been
- To see a substantial drop in individual artist’s sales, in some cases by as much as 46%,
- A loss of tax revenue as a result of fewer sales
- Greater reliance in living off their savings
- Reliance on Centrelink.
I am convinced that the repeal of the Regulations would provide the boost that is required to bring some positive benefits to the art market and the economy in general.
It is imperative that the following course of action be taken:
- The repeal of the Superannuation Industry (Supervision) Amendment Regulations 2011 (no 2) referred to as “New Regulations” which were introduced effective from 1 July 2011.
- Redefine the Sole Purpose Test because the current narrow interpretation by the ATO is not in line with international opinion. We would be ridiculed by the international art world if it was revealed that a SMSF could acquire a work of art, but members of the Fund would be prohibited to view the artwork, as the “pleasure of looking at it” would constitute a “benefit”.
We emphasise that these measures would not have a negative impact on the Federal Budget. The effect will be quite the opposite because the removal of these Regulations will generate sales; increase the profitability of the industry; increase tax and GST revenues; and relieve the burden of social welfare in many instances.
Over the years we have made numerous submissions and met a number of ministers and members of Parliament. While we acknowledge that a number of ministers and senators have expressed genuine empathy for the plight of the arts sector, no real action to safeguard the future of the industry has taken place to date.
To add insult to injury, the only action undertaken by the Coalition government in respect to the art was to drastically reduce the budget of the Australia Council – now restored to some extent - which only added to the problems of the arts industry.
Our meetings with politicians have re-informed a view that there are fewer members of Parliament who have any interest in the arts, let alone any passion. Among the most frustrating aspects of our lobbying efforts has been the absence of a minister, either at federal or state level, who is solely responsible for the Arts portfolio. It is painful to see such a vital aspect of our lives - our culture and heritage - being appended as an afterthought to various ministers and senators, who already have a full raft of portfolio responsibilities.
For example, the former federal Minister for the Arts, George Brandis, when appointed arts minister, was also holding an important position as Attorney-General. The present Minister, Mitch Fifield, also bears responsibility for Communication and government business in the Senate. Of the four portfolios entrusted to his Victorian counterpart, Martin Foley, the so-called ‘creative industries’ come a sad last in his official ministerial listings, well after his housing, disability, ageing, mental health, and equality portfolios. The sad state of affairs continues from the state to state, from government to government.
It is becoming more evident that there is no interest in the arts by either political party. Their focus is on the number of votes that various sections of the economy can provide. They do not realise that the arts are also an industry, whose contribution to society cannot be measured purely in monetary terms.
We feel that our cultural identity is at risk.
In the lead up to the elections, the current Coalition government has chosen to focus its energy on the economy, and asylum seekers. The ALP is focusing its energy on wages and taxation. Neither party has mentioned an arts policy or even referred to the arts industry.
If I was a few years younger, I might be tempted to throw my hat in the ring.
Tom Lowenstein OAM