Resale Right for Visual Artists Bill

I present a legislative statement on the Resale Right for Visual Artists Bill.

SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon CARMEL SEPULONI: I move, That the Resale Right for Visual Artists Bill be now read a first time. I nominate the Social Services and Community Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 31 July 2023.

It is my pleasure, as the Minister for Arts, Culture and Heritage, to introduce this bill today. Our visual artists are an integral part of New Zealand’s rich and diverse artistic community. Their skill, passion, and creativity represent a key contribution to our society and to our culture. However, they also have some of the lowest median incomes in New Zealand and have limited opportunities to benefit from their work on an ongoing basis. People who buy and sell visual artwork on the secondary market make money on artworks when an artist’s reputation grows, but currently none of this profit—which is a result of the hard work and success achieved by the artist—goes to the artists themselves.

Under the Resale Right for Visual Artists Bill, this will change. The bill will establish an artist resale royalty scheme in New Zealand, providing eligible visual artists with a resale right to benefit from their work. In contrast to copyright, the resale right is unable to be waived or transferred away from the artist while they are living, and so the right remains with the artist for their whole life. The resale right means a 5 percent royalty payment will be collected each time an artist’s eligible work is resold. Beyond the monetary acknowledgment of the royalty payment, this bill also provides confirmation to artists that their important cultural and societal contribution to New Zealand is both recognised and valued.

Over 80 countries around the world—including Australia, the United Kingdom, and all European Union countries—already have an artist resale royalty scheme, most of which have been in place for many years. It is time that our talented artists receive these same rewards, here in New Zealand. An artist resale royalty scheme has been a long time coming. Back in 2008, the Copyright (Artists’ Resale Right) Amendment Bill was introduced to the House, but, unfortunately, was never enacted. This Government demonstrated its commitment to an artist resale royalty scheme by bringing it back on to the political agenda in 2019, before including it as part of the free-trade agreements with the United Kingdom and the European Union.

The Resale Right for Visual Artists Bill now represents a huge milestone in a journey that began, really, 15 years ago. Vital to designing the bill has been engagement with key stakeholders across the arts and cultural sector, and the secondary art market. We have sought the views of a wide range of people, including visual artists and estates, art market professionals, advocacy groups, academics, and art and legal experts.

The key message I have heard from this sector is that there is strong support for an artists’ resale royalty scheme, with the general sentiment being that this bill is both welcome and long overdue. However, I have also heard that the scheme needs to be carefully designed to ensure that not only do artists benefit but our valuable secondary art market is supported to grow and thrive. In designing the bill, we have drawn on the insights and experiences of overseas countries who have similar schemes in place. However, New Zealand is a unique country with a diverse artistic community, including our rich and vibrant Māori and Pacific arts communities. In its definition of “visual art”, this bill acknowledges that unique context by making specific reference to the visual artworks of Māori and Pacific peoples.

For a sale to be eligible for a royalty, it must involve an art market professional or it must be a resale to or from a publicly funded museum or art gallery. The bill requires this because we know that tracking and collecting a royalty on every single sale—especially private sales—is simply not feasible. However, the bill does provide the option for those involved in private resales to pay a royalty voluntarily if they want to. I have heard through engagement that artworks by some groups—including Māori, Pacific, and female artists—are more likely to be sold privately. By enabling private sales to opt in voluntarily, we have sought to ensure as many artists as possible can benefit from this scheme.

We also know that there are administrative impacts when paying a royalty on all sales, even very low-value ones. This means that for a resale to qualify for a royalty, the sale price must meet a certain threshold and value. This threshold will be set between $500 and $5,000, with the exact figure to be set in the supporting regulations to the bill. I have chosen to set this figure through regulations so it is futureproofed and there is the flexibility to adjust it in the future if necessary.

As well as receiving royalties when their artwork is sold in New Zealand, visual artists will also be able to receive royalties when their eligible artworks are sold in countries which have reciprocating artist resale royalty schemes. For example, New Zealand artists will be able to receive a royalty when their eligible artworks are sold in the United Kingdom, and the scheme will also benefit others as well as the artists themselves. Under this bill, artists, successors, or beneficiaries can receive royalty payments for up to 50 years after the artist’s death. This provides an intergenerational benefit, and will mean an artist’s successors—including their family, whānau, or iwi—will be able to share in the artist’s creative success. As is common overseas, the artist resale royalty scheme will be managed by a non-Government collection agency which can deduct an administrative fee from each royalty collected. The administrative fee is a fee in return for the service provided by collecting the royalty, and will cover the agency’s administration costs. In this way, the scheme will ultimately sustain itself and have no ongoing costs to the Government.

We have seen the benefits of artist resale royalty schemes overseas, for example, from the commencement of Australia’s scheme in June 2010 through to April 2022, A$11 million has been generated in royalties for visual artists. Aboriginal and Torres Strait Island artists have benefited greatly, representing 65 percent of the artists receiving royalties, and receiving 38 percent of the total value of royalties.

In the United Kingdom, the secondary art market has strengthened considerably since the introduction of a resale right in 2006. This was despite concerns raised in Australia and the United Kingdom about the potential negative impacts of an artist resale royalty scheme on the art market. I have heard some similar concerns raised here, which is why this bill has been designed to minimise the impacts on the secondary market as much as possible. While the New Zealand art market will have some increased compliance and administration costs relating to the scheme, overseas evidence shows there are no overall negative impacts.

While this bill provides the key framework for an artist resale royalty scheme, supporting regulations are needed to bring the bill into operation. Regulations will set out further detail on how the scheme will operate, including how royalties will be collected and distributed. I intend to release a regulations discussion document for public consultation in April this year, at the same time as the bill is being considered by the select committee. This discussion document will give the public an opportunity to provide feedback on the draft proposals for regulations, and see how the regulations will work alongside the bill.

An artist resale royalty scheme in New Zealand really is long overdue, and I believe will be warmly welcomed by communities around the country. The Resale Right for Visual Artists Bill strikes an important balance between recognising the contribution that artists make to our society and allowing a valuable secondary art market to flourish. Alongside the Government’s broader investment in the sector, this bill will also contribute towards a more resilient and sustainable New Zealand arts and culture sector.

I urge all parties to support the first reading of this bill and its referral to the Social Services and Community Committee for the hearing of submissions and further consideration. I commend the Resale Right for Visual Artists Bill to the House.

The question is that the motion be agreed to.

I thank the Minister for Arts, Culture and Heritage for outlining the bill, its history, and, obviously, where she expects it to go. The National Party is supporting this bill but with many questions, and with reluctance, and I’ll touch on why. We are, first and foremost, very supportive of our creative and artistic community, and I’m actually looking forward to releasing National’s arts policy in the coming weeks and months to demonstrate why. But we do have reservations, if you will, philosophically with this bill. In fact, shades of it, dynamics of it, have been before the Parliament before, and it’s something which National then, as now, has real hesitations around.

But—and the big but, particularly for those who are wondering why we are supporting this—fundamentally, this is something that the House has to do. We have to do it as part of a free-trade agreement between the United Kingdom and New Zealand, and it will soon be also part of the free-trade agreement with the European Union. So it’s not really a matter of whether we can, should, or might. We are bound by that free-trade agreement to make this happen. That does raise some minor—well, actually not minor. It does raise some constitutional questions to the extent that the work done by officials to create a trade treaty in many ways binds the Parliament to be passing other legislation. We can leave that to the academics to work through, but it’s something I do want to note to the House—that traditionally with a free-trade agreement, we would pass a domestic piece of legislation to bring it into effect. In this case, we’re not only bringing domestic legislation to bring that treaty, the trade treaty, into effect but we are being asked, forced, bound to bring about this artist resale law as well. And that is of a concern to this side of the House. How we better approach that could perhaps be a discussion for the Foreign Affairs, Defence and Trade Committee or the Business Committee in times to come, but we just want to signal disquiet in that regard.

It won’t surprise anybody—you’ll probably hear it from different speakers on this side of the House—that, as I say, there’s been a variety of views around this, and, particularly, not leaping with great joy at the piece of legislation. But as I keep repeating, it’s ultimately something we have to bring about. I suppose the fundamental issue here is: why is it that a royalty is paid on artwork or in this case visual artwork when it’s not paid on, for example, shares that you buy? If I bought shares off an honourable member from the Labour side and I sell them a week later for more profit, why am I not giving a royalty back to the person who sold them to me? When I have now what is a classic car, should I be paying a royalty back to the original designers? I think there are arguments of why we can make a difference in this space. I don’t think it’s without argument, but I think it fundamentally has to be well articulated. What is it about visual artworks that requires a royalty when that artist has chosen, I assume, to sell their artwork on to someone else?

It then moves on to the practical considerations of how this is going to operate. There’s a few aspects to touch on here. One is that it is very focused on the professional art market, our auction houses, and art dealers. I’ve spoken to many. They’re not particularly thrilled about this. Of course they’ll comply—they are good honourable New Zealanders—but this is a layer of bureaucracy that is required. It’s an extra set of process, and as some have pointed out to me, it’s effectively a tax that is going to be applied. Well, in some ways it’s a tax—an extra cost that’s going to be applied to the art market.

As the Minister has pointed out, it is only directed to the professional art market. I will acknowledge that the bill says people can voluntarily choose to pay this, and kudos to them if they wish to. But you’re going to have this funny potential dynamic that people will choose to actually do their sales now through the likes of Trade Me or whatever rather than actually through auction houses or art houses. Yes, I’ve read the regulatory impact statement and so forth, but I wonder—and it’s only a question at this point, and it’s why we need a good select committee process—whether the Ministry for Culture and Heritage has underestimated what might be a transfer out of the arts’ professional sector into others.

There’s then going to be debate, of course, around just what benefit there is. I think, if I’ve read the documents correctly, we’re not even talking a million dollars a year of royalties. Now, look, don’t get me wrong, if you want to give me $700,000, that’s fantastic. But when you think of the number of artists in New Zealand and what amounts to about—well, not even, as I say, a million dollars in total of royalties a year. We’re not talking a massive amount of money. But I will stress—I know it through various reasons—our artists do a wonderful job in this country, but they are certainly not well paid. So any amount of money will be welcome. But when you look at setting up a scheme, it’s not simply about the benefits—$700,000 or so a year—but it’s also the costs, and let’s be very, very clear: this side of the House sees enormous amounts of costs as you set up a bureaucracy to note the worker, who is the owner of that, particularly if they are deceased. Let’s not even get into the copyright issues—this is for 50 or 70 years. Where’s that person now, how much is that royalty going to be, how much has been paid, who paid for it, how is it going to be transferred, and so on; let alone, of course, then moving into the tax implications. There’s a lot of complexity here, and, again, I know that the Government know this. This is not a surprise. It’s just that that’s a cost. I’m thinking the Minister could be a little bit optimistic to say that there be no cost to the Crown. If that does become the case, then someone is wearing the cost, and, at this moment, I fear it’s our art dealers.

We’ve also got the wider issues of whether this is going to function well and prudently. We will be very interested to see what the regulations say. I know the legislation as currently drafted says the minimum threshold for triggering whether or not you pay a royalty is going to be somewhere between $500 and $5,000. Importantly for the viewers at home, that’s not the bottom and the end range. It just says that somewhere between NZ$500 and NZ$5,000 becomes the trigger point. So for an artist—which I am not; you’d be incredibly generous if you paid $20 for anything I did—that will not trigger this. But where that figure is set—between $500 and $5,000—will be important.

That ultimately brings me to my last couple of points, which is around the select committee process and the Minister’s indication in her speech that she’s going to be putting out regulatory proposals. I think it’s really important that we as a select committee, or those on the select committee, get to see those regulations, as to people submitting. There’s already a little bit of a red light in my head that there is ultimately a sped-up select committee process. I understand we’re going to have to report this bill back by July this year. The select committee will be looking at the bill, as will the general public who have been asked to submit, and the public in particular will not have had time to digest the regulatory proposals and make that part of their submissions to the select committee.

So I would hope the Minister will see that there’s some alignment and that the chair of the relevant select committee will take that into consideration, because on this side of the House it’s really important, particularly when we have the sort of enabling primary legislation which enables an enormous amount of regulation to be created, to go, “What is that? What are these regulations going to be?” I do not like “blank cheque-ism”, where a piece of legislation gives enormous power to any ministry to simply make regulations without sufficient review. So I think that’s going to be really, really important.

The final point, and acknowledging why I suspect we are talking July 2023: we have two years from the signing of this free-trade agreement with the United Kingdom to implement this scheme, and, if memory serves me correctly, it was February 2022 that we signed the agreement. So, in other words, we’ve got until about February 2024 to get this into play. So I do understand the speed, but I really want to underline and emphasise that this needs to be done well and properly. We do have a number of countries—Australia, the UK, of course, and pretty much, in fact all, the European Union countries—that have this scheme in place, so we can learn from them. But the initial hesitation from the National Party remains, which is that ultimately we are not, as a Parliament, able to have a completely free conversation on whether this is meritorious or not. The free-trade agreement has bound our hands to put this into play, and, again, I think that’s something that the House needs to look at as a much wider discussion into the future. But with that, I’m happy to support it at this stage, the first reading, and to send it to select committee, and, if it passes, for the public, particularly those in the artistic sector to write in and let us know what they think.

Thank you, Madam Speaker, I’m delighted to stand and take a call on the Resale Right for Visual Artists Bill. I just want to acknowledge the Minister for bringing this bill before the House. I think it’s a real recognition to our artists and the way that they earn income, so I want to acknowledge you, Minister. I’m looking forward, as the chair of the Social Services and Community Committee, to working diligently—

Terisa Ngobi: Great chair.

ANGIE WARREN-CLARK: —thank you—across the House to get this piece of legislation into a good form and order.

I want to acknowledge Simon O’Connor’s comments. I think they were thoughtful. I thought they were useful. I certainly don’t have the view that our hands have been tied. New Zealand entered into these free-trade agreements with our eyes wide open, knowing what the consequences would be, and I think this is a good consequence for our country. The rest of the world does it, and I think that that is a good thing.

The bill does a lot of things, and I just wanted to make it really clear and to read off a list of what artwork is covered, because there are a few sets of definitions in this bill which are really useful to tie back to the legislation. It establishes a 5 percent royalty and it establishes a scheme to do that and an agency, which is a non-governmental organisation, to collect this royalty. It enables some things, like what happens if you’re an artist and you have collaborated with other artists. It also talks about what happens if you die intestate and what happens to your estate and how for how long the lasts for.

So final comments from me: the bill defines what artwork is. So that is limited copies or numbered editions and original visual artworks. This includes paintings; drawings; carvings; engravings; etchings; lithographs; woodcuts; prints, including books of prints; photographs; sculptures; collages; models; crafts; ceramics; glassware; jewellery; textiles; weaving; metal ware; furniture; and, finally, computer-generated or electronically generated devices. As it also suggests, it supports the artworks and cultural expression of Māori and Pacific peoples. I commend it to the House.

Thank you very much, Madam Speaker. It’s a pleasure to rise to contribute to the debate. As my colleague Simon O’Connor has said, on this side of the House we will be supporting this bill to select committee, with some concerns that officials who actually signed the free-trade agreement—which we support—have bound this Parliament’s hands in having to introduce a piece of legislation that is rather unusual.

I know that my colleague across the House—Angie Warren-Clark—said if the rest of the world have done it, it must be a good idea. I would not think that she would agree with everything that the rest of the world actually does.

But, you know, in this particular sense, this is the same bill that was introduced back in 2008. When this was introduced last night during the urgency motion, I decided to have a look at the Hansard debate notes that happened in 2008, and I read the speech of the Hon Christopher Finlayson. Some of the comments that he raised—some of the concerns that he raised—do sound really pertinent in our examination of this bill, and that is because this is actually about property rights.

This is about the property of an artist who paints the art, who actually sells it to someone through an art gallery or a museum, and once it’s resold, there is going to be a 5 percent tax on it. But if it happens to be sold privately, that doesn’t occur. So the tax doesn’t actually get attached if it was a private sale. There’s also a threshold between $500 and $5,000, which will be set in regulation. [Interruption] Madam Speaker, I’m trying to speak and I don’t think I said anything that was controversial, and there is massive—

Angie Warren-Clark: It’s not a tax. That’s why.

ASSISTANT SPEAKER (Hon Jenny Salesa): Go ahead, Melissa Lee. If we could just let the member give her speech.

MELISSA LEE: Thank you very much. Well, there is a fee that is being charged that is, effectively, a tax, really. People who are purchasing the art potentially have to pay the art gallery’s commission and the 5 percent on top of that.

I quote one of the things that Christopher Finlayson said, which also gives rise to some questions that I hope the select committee will actually examine: “This legislation will encourage an exodus of art transactions to jurisdictions where the royalty is not paid. Art resales will become private and underground, in order to avoid resale imposition.” I think that is a really pertinent comment that he made during the 2008 debate, and I hope the select committee will ask the officials to provide certain evidence.

The other thing he also has mentioned in his Hansard is: “The scheme has been condemned by the people it is designed to benefit. Seventy percent of the 50 million francs levied under the French scheme in 1996 went to the families of only seven artists, including the heirs of Picasso and Matisse. The same situation has occurred in both Germany and Australia. The scheme will be very costly to administer.”

I wonder, Minister—I guess this is something that we may actually traverse through select committee and also through the committee of the whole House stage—if this threshold is set at $500, for example, it is a very low threshold and it may potentially be that the cost of administering the scheme may be higher than the 5 percent levy or the resale right for visual artists that will be returned to the artist or the artist’s family, for example.

One of the things when we look at the bill: it actually talks about visual arts. I think the definition of “visual arts” needs to be quite tight in the sense that, according to the departmental disclosure statement, I note that the visual art includes a range of artwork sold in New Zealand and they include specific reference to the—and I quote—“cultural expression of Māori and Pacific peoples as well as to the ethnic and cultural varieties of the listed artwork.”

Does that actually mean that if a tattoo is created—which is cultural and has mana—and that design is sold and somebody else has it, it will incur the levy as well? So if somebody designs a tattoo and they resell it and more than one person has that design, how does the levy actually work or the tax actually work? Does that mean that every tattoo that the tattoo artist actually works on gets the 5 percent on that resale of that artwork? [Interruption] Well, these are questions that we have to actually ask. The obligation of the Government is to make good law, and I think when you come to art, we enjoy art. And I know that somebody walking past my office actually made a comment about this beautiful painting of Mount Cook which was painted in Korean colours, and that was actually done by an amateur artist.

Sometimes I go to school fairs and I collect school student art and I pay no more than whatever—I think student art often goes for a maximum, I think, of $300. So those actually don’t hit the threshold. I don’t ever resell those; I bought them because I love them. But the thing is that should I ever resell those—if I actually sell it for more than the $500 threshold; potentially it could be the $500 threshold—does it mean that for a piece of art that I bought 30 years ago, I have to go and start chasing, trying to remember which market I bought it from? These are some of the questions that will have to be asked during select committee, I think.

I do realise that this is a piece of legislation that we do need to pass because of the free-trade agreement with the UK and the EU. But I think there are major concerns that this side of the House actually does have. I think these are questions that need to be put to a select committee and the officials, and we look forward to the submission process where the public, the artists, and the industry involved can query, answer, or raise their concerns about this bill. I commend the bill to the House.

Kia ora e te Mana Whakawā. It’s always a privilege to stand and make a contribution, and this time it’s on the Resale Right for Visual Artists Bill. I’d like to acknowledge the Hon Carmel Sepuloni for bringing this matter to the House, but I want to take it back—this bill. In 2008, the Hon Judith Tizard introduced a similar scheme; that’s 15 years that these artists have missed out on royalties, and a royalty is not a tax. The money belongs to the artists, and the Minister has referred to the fact that a non-Government, non-profit organisation would be authorised to manage and gather it with a small fee. So none of that is tax; it’ll go back to the artist. And 80 countries around the world, including the UK, the EU nations, and Australia already have this in place.

I want to acknowledge that this is part of this hard-working Government. This is part of our free-trade agreement with the United Kingdom to have this in place by 2024. So I really want to acknowledge what has been said and what the intention of this bill is: the artist resale royalty right entitles visual artists to a share of the proceeds of their work. And, on that note, I commend this bill, the Resale Right for Visual Artists Bill, to the House. Mālō.

Tēnā koe e te Māngai o te Whare. I’m delighted to rise on behalf of the Green Party in support of the Resale Right for Visual Artists Bill. It establishes the artist resale royalty scheme, where visual artists will get a 5 percent royalty when their work is sold on the secondary art market here and overseas.

It is tough work living as an artist in Aotearoa, so this is really, really important progress for our visual artists that they will finally get the royalties that their colleagues who are musicians and writers already have and have had for a long time. It contributes to a more equitable art sector and brings us into international standard practice.

Now, we note this legislation is a requirement of the Aotearoa free-trade agreement with the UK and the EU. We did not support that trade agreement. However, we did support a similar change that was initiated by Labour, looking at that amendment to the copyright law back in 2008. Since that bill did not progress past that select committee referral with the change of Government, we thank Minister Sepuloni and her officials who have done so much work to get this bill to us today.

The Greens’ arts, culture, and heritage policy supports the protection of artists’ rights and the recognition of their intellectual property. It also states that we need to, and I quote, “support and promote the right of Māori to protect both traditional and contemporary Māori art and art forms via customary rights and Te Tiriti o Waitangi”.

So we note the stated intention in the regulatory impact statement that this scheme design will have flexibility to account for changes arising from the response to the Wai 262 for toi Māori, which includes the ability to recognise collective ownership of works and keep the definition of “visual artwork” broad, so it can be responsive to any developments. We very much support that.

It also notes that the engagement with Māori in the development of this bill was less widespread than had been hoped for. So we acknowledge that Toi Māori Aotearoa and Toi Iho charitable trusts were part of that consultation. They are formidable and very highly respected and representative bodies. So we encourage any Māori, Pasifika, any artists who have come from any nation or around the country to make their home here, artists who are takatāpui, rainbow, disabled, or from any other marginalised communities to make sure that you submit on this bill, come to the select committee, be heard, and make sure that we’re listening to what you have to say, what the art sectors might have to say.

I note that the Minister for Arts, Culture and Heritage reported last November that the secondary art market had more than doubled for the 2021-22 year, and that’s because the secondary art market generally outperforms other markets in times of economic uncertainty, which COVID brought us. So where auction house sales account for like 80 percent of all the sales, they did very, very well out of that, but the artists made nothing with that huge growth. So I’m very excited that this artist resale royalty scheme means that those dealer galleries, those independent agents, those brokers, those public institutions in Aotearoa, and any of those other countries will be able to make use of this or are required to do this.

I think people would be surprised about how many people who buy art privately will definitely do this, because when you invest in art, when you love art, you’re actually doing it because you respect the artist—or that’s where I come from. In fact, my father was an artist and a master carver. I grew up in a whānau of artists, so I know what this bill means, not just for our flashest artists who sell works for thousands and thousands of dollars, who will probably benefit the most from this but for those still starting out and just getting by—and a shout-out, you know, to someone like my niece Savannah, who’s just trying to get a fledgling art business going; people who do their art while they have full-time jobs, because, actually, our art is our cultural expression. It’s our wairua. It’s our mauri. It’s our rongoā.

So I think that this bill enhances the mana of our artists, our visual artists, and it makes life a little bit better. I will shout out then to the painters; the drawers; the engravers; the lithographers; the board cutters; the printers; the photographers; the sculptors; the collage and model makers; the crafters; the weavers; the creators of ceramics, glass, jewellery, textiles, metal ware, and furniture; and those whose visual arts are created using electronic means. For all of them, I commend this bill to the House.

Thank you, Madam Speaker. I rise on behalf of ACT in support of this Resale Right for Visual Artists Bill, very hesitantly and only for the first reading.

For people following along at home and at Ryman and other villages up and down New Zealand who watch Parliament TV, what is this bill about? Well, this bill says that if somebody creates a piece of visual art—and it could be a number of prints, it could be a painting, it could be a carving—then for 50 years after it is created, if one person sells it to another, then 5 percent of the resale value, excluding GST, incidentally, and excluding any buyer’s premium, must be sent back to the artist or their estate. On the face of it, when you think about poor starving artists, and particularly those artists who may not have their brilliance discovered in their natural life, or at least not at the time they produce their works, it seems like a reasonable thing to do.

The problem is that we have far too much bureaucracy and far too many laws and requirements that people are required to spend far too much time complying with in this country and not enough time actually producing valuable stuff. This law is a perfect example of that, because we had a Government that only two or three weeks ago said it was going to return us to bread and butter issues, and now it is trying to make sure that people get royalties after the fact on paintings. And the question you might ask is—

Hon Members: Bread and butter for artists.

DAVID SEYMOUR: And the Labour Party say this is bread and butter for artists. I mean, this is how desperate and deranged the Labour Party has become. They’re now seriously trying to say that this bill is being done to help starving artists with their bread and butter. Give us a break—give us a break.

Let’s get to the purpose of this legislation.

ASSISTANT SPEAKER (Hon Jenny Salesa): That’d be great. Let’s come back to the bill.

DAVID SEYMOUR: Thank you, Madam—well, actually, with the greatest of respect, Madam Speaker, I’ve been discussing the bill the whole time. I’ve returned to discuss some heckling by the opponents. It’s unfair of you to characterise me as not speaking about the bill.

The reason for this bill can actually be found in the regulatory impact statement, and what it says is: “What is the context behind the policy problem and how is the status quo expected to develop?”, “Diagnosing the policy problem”. And it’s very simple. It says, “The UK FTA commits New Zealand to introducing a reciprocal ARR scheme.” So this doesn’t make sense. It’s not a bread and butter issue, as the Labour Party just tried to describe. It is being done, according to the bill notes that the Government produced and the regulatory impact analysis that the Minister for Arts, Culture and Heritage has produced—it’s quite a thick piece of paper, a lot of paperwork, a lot of bureaucracy in producing all of this. It’s been done because our Government signed up to a free-trade agreement (FTA) and agreed with the European Union that they would do this, and now they’ve come to Parliament and said, “Can you please do it? Because we made this commitment.”

That’s why ACT is reluctantly supporting this bill, because we’re free-traders and we appreciate that we have to keep promises that the Crown has made on New Zealanders’ behalf overseas to maintain the credibility of our whole country. So that’s why we’re doing it for them. But I just ask a simple question. You know, if the United States, Canada, Switzerland, Japan, and Korea—that’s a substantial portion of the entire world economy—do not have such a scheme as this, was it really necessary that New Zealand signed up to one when negotiating to try and sell a bit more butter and beef to the French?

To give you an idea of why they insisted on it, this goes back to the late 19th century. That is the late 1800s when a resale right, or, as they say, charmingly, droit de suite—which is French for right to follow—was introduced. So this is a nearly 200-year-old French law. That’s why we’re doing it. It doesn’t stack up. It doesn’t make any sense. It is not what the French would call du pain et du beurre— the bread and butter. It is something that they are being forced to do because they signed up to a free-trade agreement without looking at the details. So now New Zealanders will face additional bureaucracy for almost no benefit, and I say “almost” because here’s a few predictions. You see, if you put a 5 percent tax on something, and that’s what this, effectively, is—

Angie Warren-Clark: What tax?

DAVID SEYMOUR: —a 5 percent tax on selling an artwork, which then must be transferred to a particular beneficiary—well, when the Government puts a tax on something, and the Labour member says, “What tax? What tax?”, let’s have an economics lesson. You know, when the Government forces a person to pay as a condition of doing something, that is a tax—that is a tax. This Parliament’s been asked to make a law saying if you want to sell between a professional art dealer and another professional art dealer, then 5 percent extra must be paid for a specific purpose. That is a tax, and when this Parliament puts a tax on something, one of the things that happens is people end up paying or being prepared to pay less for it. So one of the things that’s going to happen is that when someone buys an artwork from an artist in the first place, they know that they’re going to get less revenue when they sell it because of this new tax.

So one of the things that’s going to happen, ceteris paribus—that’s Latin for the Labour members that actually got rid of Latin from the curriculum—other things being equal, is that, actually, artists will be worse off when they sell their art the first time because there is now a 5 percent tax on every resale. So when you look at “Are they going to be better off overall?”, well, actually, not so much.

Here’s the other issue. This tax only applies if a professional art dealer is involved in the sale. So it’s going to create the incentive to actually do sales off book, because if you’re buying a $1,000,000 painting, if you avoid this, that’s $50 grand. Are people going to find ways around that? Of course they are, and that’s another layer of bureaucracy involved in avoidance behaviour.

And you know what I find interesting? It’s that we’re at a time in our history when this country faces many challenges, but in order to raise rational debate and rational objections on basic economic grounds, do the Labour Party listen and say, “Oh, well, that’s an interesting point.”? No, you could hear them before. They’re quieter now because they’ve run out of things to say. But you could hear them before rabbiting on, raving, and that’s why we don’t have decent discussion in New Zealand. That’s why we’re losing our ability to problem solve. So we actually need to ask ourselves, is this the right law for New Zealand? And is it needed in light of the free-trade agreement with the European Union? That is why ACT is supporting this law to the select committee.

But the question we’d like an answer to is: what happens if we don’t pass this law in respect of our free-trade agreement? Because we already know it’s a bad policy. It’s just going to distort the market and lead to avoidance behaviour and additional compliance and bureaucracy, more people employed in Wellington. I’m sure the Ministry for Culture and Heritage think it’s fantastic. They’ll need a new office to administer it. However, we’re going to find that we have a more bureaucratic country with less benefits than people think, and, as a result of that, we’re going to have to ask ourselves a question of the select committee: is this actually necessary in order to comply with the conditions that we have signed up to in the European Union FTA?

I think it’s up to Parliament not just to go along with whatever it is that the executive signs up to, but actually scrutinise commitments that the Crown has made and send a clear message to the Crown that if you go and sign up to international agreements with other bodies outside New Zealand, then you’re putting New Zealand’s credibility on the line and you better have got it right. And if you absolutely can’t wriggle out of this, then, unfortunately, Parliament is going to have to put a whole lot more 200-year-old French bureaucracy on to New Zealanders. However, if there’s a way out of this where New Zealand can avoid this bureaucracy, where New Zealand can actually carry on as a free and open society, just by that little bit of difference of this one law, then I think we should be asking how we can do it.

So the ACT Party will support the law to go to select committee. We look forward to hearing from people. No doubt there’ll be people from the artistic community. We should listen to them. There’ll be people in the art-dealing world. We should listen to them. There’ll be people from foreign affairs and trade, and we should listen to them. But what is important is that New Zealand does not accept additional bureaucracy for no benefit when it’s not even required by our international obligations. And if that is the case, we will be opposing later stages of this bill. Thank you, Madam Speaker.

Kia ora e te Māngai o te Whare. It’s always a pleasure to listen to an economics lesson from the member opposite, and particularly wonderful to hear about the freedom from bureaucracy—ah, yes, the freedom to starve in a garret if you’re an artist. So there are a couple of ways that this butters the bread. It butters the bread of those artists who currently, on the whole, earn well under the minimum wage.

I remember speaking to a very famous young New Zealand artist, whose works now sell for tens of thousands of dollars in the Whangārei Art Museum—an excellent place to go, members, should you be in Whangārei—and this person said to me that she had sold art in the past. She had got all the way somewhere and her car had broken down. She had so little money, she had to hock off her artwork. She got just enough to get her car back on the road—I think it was $350. That work is now selling for thousands upon thousands, and she doesn’t see a cent of it.

I think also that Mr Seymour might like to consider—I think the quote was “to sell a little bit of butter and beef”. It may also be slightly relevant to the bread and butter of the farmers producing said bread and butter. But never mind, let’s leave that one to the side.

This is a relevant piece of legislation to help our artists survive. At the moment, and this goes to Melissa Lee’s earlier comment about tattooing, if you have copyright and if you have a work of art that can be replicated easily—so a book, a song, a tattoo design—you get copyright on that. If, however, your skill lies in producing original pieces of art—one painting, one carving, one piece of weaving, a limited edition of prints—you sell that once and you sell it once only, and you miss out on the increasing value of your work.

Art adds immeasurably to the value of our society. It was, I think, a reasonably good politician—and even Mr Seymour may agree—Sir Winston Churchill, who was told by his leaders and economists in his war effort, “We need to cut the arts funding because we want to fund more tanks.”, and he said, “Sure, but what are we fighting for?”

This piece of legislation enables our artists to keep body and soul and head above water, and, yeah, to earn their bread and butter. I commend it.

Thank you, Madam Speaker. I rise to take a call on the Resale Right for Visual Artists Bill at its first reading.

Isn’t intellectual property interesting? I am not particularly expert in the area, but I do always find it fascinating to grapple with these concepts of who owns intellectual property to—

Angie Warren-Clark: Speak some French to us.

CHRIS PENK: Pardon me?

Angie Warren-Clark: Speak some French to us.

CHRIS PENK: Speak some French to us—maybe later. No, I don’t trust my high school French or my high school Latin, actually, for that matter, sufficiently to do that, so you’ll have to do with my bad high school English instead.

So, with this bill, we’ve heard from others that there are a couple of reasons, I think, in summary, that we might agree on this side of the House to support the bill at its first reading. The first and most obvious is because there’s piece of international law that says that we should, a bilateral agreement admittedly as between New Zealand and the EU—I suppose at that multilateral level there are more parties involved. But, roughly speaking, we’ve signed up with the EU as a country to various different terms and conditions, to use the language of the private contract, and this is one of them.

So with the executive having signed up the country to do that, the Parliament is being asked to ratify that, essentially, so we’re obliged in good faith to consider that as a Parliament. National’s said that as an exercise in respecting that treaty-making process and good international relations, we will do just that. So we support it at least to the first reading. And, of course, the other reason that we have said we’ll agree to support at first reading is because, at the select committee stage, we’ll have the opportunity to hear from those in the sector, but also those more widely, I think, who will have a view on this.

It’s pretty novel within New Zealand to have a resale right, such that the royalties will accrue to the originator of the work, the original owner of the work, the original creator of the work, so it’ll be interesting, actually, to hear the views of those who are most directly affected. I suspect that we will hear overwhelmingly from people who are in the business of making art of various types that they are in favour of this. But I also wonder if some unintended consequences will be aired. I think it’s a reasonable question to ask as to whether this might have a chilling effect on sales in the sense that the thing that a person purchases isn’t an unencumbered title to that property in the sense that there are no further obligations to a third party, of course. In selling from person B to person C, person B will, of course, have an obligation back to person A to give them some percentage of that. So that’s, I think, a reasonable question to ask. And certainly for those on the select committee, I’m sure they’ll be interested in hearing those views, and I look forward to any of those discussions that I’m fortunate enough to take part in. So that’s a couple of reasons that we might, and, in fact, do, support it at this, the first, reading.

Then I suppose, for the sake of completeness, within the rest of this short contribution that I’ll be making, it’s worth considering if there are any factors—that we shouldn’t support the passage of the bill further. Without prejudging that decision, there’s an obvious point around consistency. So why should it be that art or visual art is covered by such a regime but not other goods? We can go back to the first point, which is, of course, narrowly speaking, this is what’s in the free-trade agreement. But if it’s a good idea for this particular sector, might it be a good idea for others? I probably would tend to suggest that that won’t be a conclusion we reach, but it’s, again, I think, a fair question at such an early stage of New Zealand’s consideration of these kinds of matters.

And, finally, the question of red tape—the practicality, the practicability, the enforceability of such a regime will be really interesting. I don’t know if we’re going to inadvertently create a black market for art or—I mean, if such a thing doesn’t really exist; I suppose it might. I wouldn’t know, but that’s the point about a black market, isn’t it? You just don’t know.

Anyway, these are all fair considerations, I think, both for and against, and we look forward to that discussion at the select committee. In the meantime, as I say and as others have said on this side of the House, we support the bill at this, its first, reading.

Mālō e lelei, Madam Speaker. I rise to take a brief call in support of this bill, which, in essence, actually provides an entitlement for visual artists to be part of a share of proceeds in situations where there’s a resale of their original works. There are two things that I want to say about that. The first is that this is an approach that is common around the globe—that’s the first thing. The second is that I think most reasonable New Zealanders would think that it is fair and reasonable to be able to do that.

It also establishes a specific scheme that will ensure that that royalty payment that would sit at 5 percent to the artist in situations where the definition covers the particular sale and the visual artist themselves.

The bill itself also at first reading establishes a collection agency that does two things: (1) it’s a non-governmental agency, and, (2) it’s one that is not for profit. So it aligns itself in a similar vein in terms of what this bill is seeking to achieve: fairness, and what would be considered as something that is reasonable. The bill as it’s currently drafted would authorise that collections agency to manage the scheme in itself but also would allow for enforcement opportunities around that.

So this is something that is common around the world. It is something that is fair and reasonable. I’m sure that the Social Services and Community Committee will be focused on listening to the community, as it always does, and will engage with this bill in a positive fashion. I commend this bill to the House.

Mālō e lelei, Madam Speaker. It’s with great pleasure I rise to take a quick call on the first reading of this, the Resale Right for Visual Artists Bill; a bill that is long overdue. I am proud to be part of this Labour Government that truly values the talent and hard work of artists and Aotearoa New Zealand; to be part of a Government who ensures fairness—and, essentially, that is what this bill is.

We know currently that those who buy and sell visual arts on the secondary market make money. But we also know that the artists of those artworks—the original artworks—they don’t see any money, any profit from those sales, and that is not fair. This bill will establish an artist resale royalty scheme in Aotearoa New Zealand, and it will provide eligible visual artists with a resale right to benefit from their work. This differs from the current copyright resale right, as it’s unable to be waivered or transferred away from the artist while they are living. There’s a 5 percent royalty payment—as we’ve heard—that will be collected each time a visual artist’s eligible work is resold, which is great for the artist.

Engagement was sought with a range of experts in this sector and people in this sector, and the strong feedback was that there was support for an artist resale royalty scheme—but, actually, many said, again, this is long overdue. We know and we’ve heard that over 80 countries around the world already have this in place: some of them have a longstanding artist resale or some kind of artist resale royalty scheme. And so this is about making sure that Aotearoa New Zealand also offers that to our talented and fantastic artists. I want to also add my voice and say mālō ‘aupito to the Minister—the Hon Carmel Sepuloni—and her team for bringing this through to the House, and I commend this bill to the House.

Thank you, Madam Speaker. I’m pleased to be standing and speaking in support of the Resale Right for Visual Artists Bill, and, in doing so, I want to acknowledge the many very talented New Zealand artists that we have, and I’d particularly like to acknowledge our student artists who I have had some dealings with over a number of years, and it’s always a real pleasure to be involved with student art. As many of the speakers have canvassed, this is part of a free-trade agreement. So, in fact, we are not debating whether or not, but rather how to implement this piece of legislation. But notwithstanding that, I do think there are issues that need to be canvassed, and I think it’s important for the artists; they deserve that we canvass it fully and make sure that we understand exactly what we are doing.

So I suppose the first area that I’m trying to get my head around, and I think it will be useful to hear submissions from artists, is around the definition of “visual artwork”. So, you know, is photography included? Is carving, would korowai be included, is mixed media included? Would animation be part of it? So I think there’s some definition aspects where we need to listen to the artists because that is always evolving with particularly digital art, evolving so quickly.

The other one is around the entities and the resale. Here it says the resale must involve an art market professional, or be to or from a publicly funded art gallery or museum. And I think of a number of other publicly funded entities that have quite substantial collections, and if you look at the education sector, often universities and polytechnics have an art procurement policy and so they will have quite substantial collections. Often those pieces of artwork will have been purchased when a student is a very new artist, and so they may have been purchased at a very low price. So how would that be dealt with if there is quite a substantial change in appreciation of that artwork?

Also, there’s a number of artists in residence schemes that operate across the country. Often those artists in residence will donate a piece of their artwork to a public entity. How would that be dealt with? Would the first sale of that be the first sale because it was donated initially, or would it be the subsequent sale? So I think there are genuine details that do need to be ironed out in the select committee process.

The cost of administering the collection of the commission is a worry. I’ve looked at the estimate, that it may be around $700,000, and my concern is that that could very quickly get eaten up by a hungry collection agency, particularly if they are having to sift back and find relatives—50 years later—of an artist. So I would hate us to be in a position where we approve a piece of legislation that is giving rights to visual artists, and yet the amount that finally gets to them ends up being a very, very small amount. So I’ll again be interested to hear what artists and those in the art industry say about that. Also, I’m somewhat perplexed around the notion that if the income is not taken up by the artist, then that will be redistributed through a cultural fund for the benefit of the artistic community. That’s an incredibly broad statement, so I think we’d be wanting to see some teasing out of just exactly what that means.

I am incredibly supportive of our artists and, as I said, particularly our student artists in their very early days. I just want us to make sure that as we work through this, we do it in a way that is respectful, not just congratulating ourselves that we’ve got a piece of work here when, in actual fact, some of the detail may mean that the money actually getting to those visual artists doesn’t occur. So I just think we need to take a deep breath and not be critical of the fact that we are wanting to look at the detail, we are wanting to hear from the submitters, we are wanting to get some definitions right so that we’re not just virtue signalling, we’re not just congratulating ourselves for having passed a piece of legislation but, by all accounts, we may be behind some of our other countries that we might normally compare ourselves with. I understand that Australia may have had this for about a decade, so there must be learnings that we can pick up from other jurisdictions that have these schemes in place, to make sure that we get the detail right, that the money is collected in a way that it’s not all eaten up by the administration, or the implementation of the collection, and that those artists who need this funding and deserve this funding do actually get the funding.

So with that, I’m happy to support the bill to select committee stage. Thank you.

Thank you, Madam Speaker. It’s a real pleasure to stand in support of this bill. In Invercargill, outside my office, on the other side of the road, is He Waka Tuia gallery. It’s an amazing gallery, and I often pop in there on a Friday night when they’ve got exhibitions opening, and there’s always some amazing art on display. But the problem we’ve got at the moment in New Zealand is that after that initial sale by an artist, they get very, very little recognition financially when their work is on-sold in a secondary market. And that means that sometimes we’ve got situations where you’ve got artists struggling on really low incomes while others are financially making a profit from the on-selling of their work.

So what this bill does is make sure that visual artists are financially recognised when their work is on-sold in the secondary market in particular circumstances; so if it’s being sold by art market professionals—that’s professional auctioneers or art dealers—or if it’s been bought or sold in publicly funded galleries and museums. And, in such cases, what we’re saying is that we think a 5 percent royalty on the resale price is returned to the artist, or, following their death, whoever they’ve indicated they want to receive that in their will.

And I’d just like to point out to speakers such as David Seymour that this is actually not a tax that’s going to be returned to the Government; it’s actually a royalty that’s going to be returned to the artist who produced the work. And also, the other thing is that the resale royalty is voluntary for those that are privately selling the artwork between two individuals. And so it’s really important to make sure that what we’re seeing is that the financial benefits from the work would get returned to the artist. So it’s a really, really important bill, and I’m very happy to commend it to the House.

Motion agreed to.

Bill read a first time.

ASSISTANT SPEAKER (Hon Jenny Salesa): The question is, That the Resale Right for Visual Artists Bill be considered by the Social Services and Community Committee.

Motion agreed to.

Bill referred to the Social Services and Community Committee.

Instruction to Social Services and Community Committee