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 Artists to be rewarded with resale royalties

 

Following the recent conclusion of Free Trade Agreement negotiations between New Zealand and both the EU and the UK, new intellectual property obligations for New Zealand  have emerged. The establishment of the Artist Royalty Scheme, as announced by the Hon Carmel Sepuloni¹, the Minister for Arts, Culture and Heritage, is one such obligation. 

Much like musical or lyrical royalties, it acknowledges the creative license of the artist to a royalty payment for each artwork resold on the market during the artist’s lifetime, and 50 to 70 years after.²

Over 80 countries have enacted some form of royalty scheme for artists.³ In 2008, an amendment to the New Zealand Copyright Act suggested NZ was following suit, but this fell away with a change of  government.⁴

Under the current regime, any profit made from the growth of an artist’s reputation and success currently goes to those selling artworks on the secondary market, whilst the artists behind that success get no monetary reward.⁵

However, pressure to implement a scheme has arisen out of a maturing market with record-breaking auction sales.⁶ As recently as 2021, Michael Parekōwhai’s ‘A Peak in Darien’ boasted a $2.05 million purchase price, the most paid for a piece of New Zealand artwork.⁷ These increasing sales may be a result of more disposable income due to lack of travel during COVID-19, and an increase in investors in the NZ art market.

The scheme acknowledges this explosion in the art resale market, and thus the financial means to reward artists for their intellectual property. However, Ms Sepuloni hopes the scheme will go further than mere monetary acknowledgement, stating, ‘this is confirmation for artists that they have rights, and their cultural and societal contribution is valued’.⁸ Campaigns such as Equity For Artists who have advocated for artist resale royalty rights, see this as a great step towards equality and fairness for Kiwi artists and their intellectual property.⁹

The scheme aims to support both emerging and established NZ artists, as their success flourishes nationally and internationally. It aims to align with ‘common international practice’ in conjunction with the FTAs. As a result, the scheme will be available in corresponding overseas jurisdictions on a ‘reciprocal basis’, including the UK and EU. The Government hopes that the Scheme will strengthen these international relationships, as well as provide monetary reward to artists for artworks resold overseas.¹⁰

The Scheme will be a 5% flat rate royalty for artworks sold on the resale market, accounted for before any additions or deductions, to avoid burdening buyers, sellers and industry professionals.¹¹ Buyers will have to pay this royalty fee when purchasing resold art at auction, or from dealers or galleries.¹² The scheme will be enacted via standalone legislation, and is set to process its way through Parliament before its expected release in late 2024.¹³ More to come.