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Tax reform for Australian artists

Tax reform for Australian artists

Written by: 
Evan Lowenstein

In the previous edition of  Lowensteins’ Newsletter, we advocated a radical need to reform the tax system as it affects Australian artists. We have had positive feedback about this suggested reform from several clients in the arts community, who have joined us in  believing that there is a need for some renewed thinking in the implementation of  tax policy and the arts. 

So, as promised, we are pleased to release  statistics to support our claim that the visual arts in Australia is suffering enormously from economic hardship. We believe that a lot of this has come about because of a declining interest by collectors in acquiring artwork.

The overall downturn in the art market  has, I believe, been caused by a combination of compounding factors: the negative effect of significant legislative changes to the superannuation laws, the introduction of  resale royalties and, of course, a decline in the level of government support and funding - all coinciding with an overall economic downturn due to the GFC.

Lowensteins‘ extensive arts data base maintains historical data going back some fifteen years. It  shows  income of some 3000 practising artists across all disciplines and media. Our observations about the current financial plight of Australian artists is borne out by a real decrease in artists'  income.

For the purposes of this research, we analysed anonymous data that looked at three classes of artists. We have named this study: The Lowenstein Index. 

 

The Lowenstein Index 

We have divided up the sample into three groups: 

1. Established Artists 
This group of artists includes many who are household names ie those who have been involved in selling and exhibiting commercially for many years. 

They are considered senior artists and many are mentors to a younger generation of artists. 

2. Mid – Career Artists 
These are artists who would be considered to be in the prime of their career and have enjoyed commercial success for several years. 

A major characteristic of these artists is that they still need to rely on a source of additional income - be it from teaching or other  art related occupational groups -  in order to earn a living wage and support the costs of their practice. 

3. Emerging artists 
These artists have only recently come on to the commercial scene in the last 5-10 years or so. Most of them have had some art training at tertiary institutions. They are part of the emerging art scene, and some have participated in artists-run spaces and shared studios. 

Methodology

We have drawn  up a list of a  substantial number of artists from all three classes from our data base, then analysed anonymous data, including  gross sales over a seven year period, between  2010 and 2017. 

These figures indicate the trend in artists’ incomes, subject to some minor statistical errors. 

Lowensteins does not represent every artist in Australia but this research represents a fair sample on which to base further study. 

What the figures show:

  

Understanding the figures 

We have seen quite a large increase in sales of works by emerging artists over the seven year period of our study. This appears to be at the expense of the older and well-established artists. 

This trend has been reported by many galleries where the works of younger artists are more affordable and, perhaps, seen as a better investment than older artists’.  

The fairly lacklustre increase in the income of mid-career artists could be a  factor of some fatigue in the market place where this group is seen as neither terribly fresh nor the latest thing (motivation for the  recent generation of art buyers). However,  they are not yet in the 'collectible' category of masters of the Australian art market. 

Effectively they are caught  between the two other classes. 

The large increase in sales of the emerging artists is explained by the fact that, as their careers have taken off, so have their prices from quite a low base. 

Collectors are more likely to purchase work from emerging artists in the hope of making a greater capital gain than from the more established artists. 

These figures point to a market that is in need of an injection of some useful government policy related to the financial situation of artists to get things moving again. We argue that tax reform is vital for Australian artists to sustain a lifetime career. 

In this Newsletter, you can learn more from artist, Ian Wieczorek, about how government can support creators via the tax system. In the 1990s he moved from the UK to the Republic of Ireland, a member of the European Union, that has a reputation as a tax haven for those employed in the arts and for having a supportive funding scene. 

 

The next step 

In the next few weeks I will be meeting with more people in the cultural economy sector to share ideas about how a change in tax policy could increase the prosperity of artists and re-invigorate the visual arts in Australia.