For those of us in the private Aboriginal art market, the article 2 weeks ago on ABC News about the downturn in the Aboriginal Art market since 2007 comes as no surprise. Trying to put a finger on any one cause is difficult. Many reasons seem to converge all at the same time. Before 2007 Aboriginal art enjoyed a popularity boom, especially from mum and dad investors who could add the art to their investment portfolios, hang it on their walls for all to see and enjoy knowing that the art would increase in price in the years to come. If it didn't, well they still had it to enjoy!
The US market and interest in our Australian art was immense at this time, and coupled with the strong American dollar and weak Australian dollar, made investment in our art very attractive. Then the bubble burst! Who would have thought at the time that the American economy was in such dire straits?? And that most of Europe was to follow?
But more was to come when the Australian government decided to change the laws that govern superannuation and made it mandatory for investors to store their art work and not hang it on walls and enjoy it. The costs involved in finding a storage room led some superannuation enthusiasts to put their art on the market again, creating a glut of artwork.
Another blow to the market was the Resale Royalty Scheme in 2010 where a percentage of the artwork is paid back to the artist on the resale value of paintings over $1000. More red tape and bureaucracy for the galleries! We saw a downturn in sales of art over $1000 because of this scheme, although it is slowly improving again. It's hard to know how much the artists are actually benefiting from this. I believe the galleries are mostly doing the right thing and paying money into the royalties scheme, but is the money then actually being distributed to the correct people? Or is the majority of the money sitting in banks or similar making the big bank managers happy! I wonder how much revenue has been made for the artists so far and if they themselves are happy with the scheme??