Government Ensures Artists Get Resale Royalties – NZ Government

In line with Aotearoa New Zealand’s Free Trade Agreement (FTA) with the UK and the EU, the Government is establishing an Artist Resale Royalty Scheme to ensure the creators of visual arts are recognised and rewarded when their work is resold on the secondary art market.

“This is about fairness. It underlines our Government’s commitment to honouring the tremendous artistic skill and creativity of so many of our visual artists,” Minister for Arts, Culture and Heritage Carmel Sepuloni said.

“I believe we’ve struck the right balance between allowing a valuable and important resale market to flourish, and respecting the contribution of the original creators of art. Beyond the monetary acknowledgement, this is confirmation for artists that they have rights, and their cultural and societal contribution is valued,” Carmel Sepuloni said.

“This is not only an important part of our free trade agreement with the UK and EU, but it places Aotearoa New Zealand alongside more than 80 other countries who now have resale royalty schemes, aligning with common international practice.

The Artist Resale Royalty Scheme will support our visual artists by ensuring that a five percent royalty is collected when their work is sold on the resale market. The Scheme will be a flat rate of five percent before any additions, deductions, or other charges, ensuring it does not place too large a burden on buyers, sellers, and art market professionals.

“People that buy and sell visual artworks on the secondary market make money on artworks when an artist’s reputation grows and they achieve success. However, currently none of this profit, which is a result of the hard work put in and success achieved by the artist, actually goes to the artist. Under the proposed Artist Resale Royalty Scheme this will change.

“Standalone legislation will be written and pass through the House before the Scheme is introduced by late 2024. The Scheme will be available to citizens and residents of New Zealand or residents of a reciprocating country.

“The Government has engaged on how the Scheme can bring benefits to artists while also minimising any administrative or compliance burdens on art market professionals. We have engaged with the New Zealand art sector, including with artists, including Māori and Pacific artists, art experts, art market professionals, public galleries and museums, and key sector organisations.

“Another key element of this Scheme is that it’ll operate on a reciprocal basis with corresponding regimes overseas, for example in the UK and EU countries. I’m pleased that the recently concluded FTAs have provided us with the springboard for new engagement and even closer ties with the UK and EU.

“The establishment of this Scheme is a really important step to support emerging and established visual artists in Aotearoa, ensuring that they can continue to see benefits for creating amazing art and enabling the creative sector to thrive,” Carmel Sepuloni said.

Trade and Export Growth Minister Damien O’Connor said he was pleased to see the benefits of the UK and EU FTAs flowing into all sectors of the community.

“Our Trade for All agenda saw us working hard for all New Zealanders to land our historic FTAs with the UK and EU. I’m pleased that the financial outlook for our visual artists will grow as their international reputations do, as a result,” Damien O’Connor said.

The Scheme will:

• help visual artists benefit from the resale of their original works, especially when their works appreciate in value over time;
• align New Zealand with common international practice and enable our artists to benefit when their artwork is resold in countries that operate reciprocal schemes;
• support more sustainable careers for visual artists through ongoing royalty payments, in a similar way to other creative professionals.

 Notes:

• An Artist Resale Royalty Scheme was agreed as part of the New Zealand – United Kingdom Free Trade Agreement, which was signed on 28 February 2022. The Agreement includes a commitment to establish a New Zealand Scheme within two years of entry into force of that Agreement. The European Union – New Zealand FTA, which was concluded in June 2022 contains a similar commitment. It is expected that this Agreement could be signed in 2023.
• The duration of the royalty right will be linked to the duration of copyright, which is currently the life of the artist plus 50 years following their death.
• The royalty will be a flat rate of five percent, before any additions or deductions, or other charges, such as a buyer’s premium, commission (on private sales), or GST. The price threshold at which the five percent royalty will apply will be set through regulation.
• The resale right would apply to resales that involve an art market professional and resales to and from public institutions. The right could be held jointly by a group of artists.
• The resale right would be inalienable, meaning it cannot be waived or transferred (except on death). Liability for the royalty payment would be jointly shared by the seller and the art market professional.
• The Scheme will be managed through a single, non-government, not-for-profit, Government-appointed collection agency.
• There will be some establishment and operational costs before the scheme becomes self-sustaining. The scheme will become self-sustaining through deducting an administration fee from the royalties, the amount of which will be set through regulation.