Visual artists to receive royalties from December

Friday, 14 June 2024

Artworks that sell for $2000 or more will be eligible for the royalty.

Artists will be paid a 5% royalty when their work is resold by auction houses and dealer galleries from December 1 this year, it’s been confirmed.

And after a selection process, the non profit Copyright Licensing NZ will collect, manage and distribute the royalties.

A bill which guaranteed the royalty scheme would become law was passed in the House last year. New Zealand had been required to enact a scheme under its newest free trade agreement with the United Kingdom.

Artworks that sold for $1000 or higher were to be eligible for the royalty, however on Friday morning the Ministry for Culture and Heritage said the threshold had been raised to $2000, to align more closely to the free trade agreement. The United Kingdom’s threshold is £1000.

Six paintings by Charles Frederick Goldie were auctioned by Art+Object in March this year ‒ the lowest sold for $487,400, while the highest went for more than $2.1 million.

Previously auction houses argued the figure should be higher than $1000, saying a low threshold would place too big a burden on re-sellers. Friday’s news the threshold had been raised would be welcomed by those groups, but it means the amount of resold artwork that actually qualifies for a royalty will likely be far less.

Copyright Licensing NZ is a non profit that helps authors, publishers and artists get their due when their copyrighted work is copied or shared.

Ministry for Culture and Heritage chief executive Leauanae Laulu Mac Leauanae said Copyright Licensing was chosen to oversee the scheme because of its strong relationships with artists and their estates, and its ability to maintain those relationships with care and mana.

Sam Irvine, chief executive of Copyright Licensing NZ.

The ministry and Copyright Licensing had agreed on outcomes, services, monitoring and payment schedules for the scheme with great care, said Copyright Licensing’s chief executive Sam Irvine.

“The intellectual property system exists to both protect and reward the creativity and imagination of artists. If we neglect that protection and reward, then society will slowly run out of both new ideas and soul,” Irvine said.

“Up to now financial reward for artwork only speaks to the creator once – when it is sold for the first time. With the establishment of [the scheme], now as an artwork passes through the market, it can speak back to the artist whose imagination and craft created it in the first place.”

The organisation would engage with the country’s visual arts sector over the coming months on the scheme’s operating details, in preparation for the December 1 launch.

A 20% administrative fee will be deducted from royalties to cover administration costs related to the scheme, which will be retained by Copyright Licensing. But officials hope it will eventually be self sustaining.

With unclaimed royalties, Copyright Licensing will establish a cultural fund to support career sustainability in the arts.

The scheme, which recognises the fact that art appreciates in value, is broadly supported by New Zealand’s arts community and was expected to generate about $702,000 in royalties per year, according to previously released papers.