Guest Post: Open letter on the Cooper report, art and superannuation

I don’t usually do guest posts around here but regular commenter and correspondent John Walker asked me to post his response to the proposed Cooper report into superannuation. The report recommends amongst some other things that Self Managed Super Funds be forced to divest themselves of their art collections – something that would have profound consequences for artists.

It’s something i may get around to writing about myself in the near future, but in the mean time, here’s an open letter from John:

Open letter to the Government

Re: Cooper Report recommendation and its unintended consequences

I will never forget the day in 1990 when an art collector (then a partner in a leading law firm) dropped by my studio. He cheerfully told me that he had just bought a very good Colin McCahon painting at auction at one of the many forced sales of art collections by failed corporations. He had paid less for this painting by a famous dead artist than the typical asking price for a successful artist under 40 years of age. The next five years were economically disastrous for living artists and gallerists aged between 30 and 40; many did not survive as practitioners. The legacy of those years is still evident today; there is a gap in the demographic of practising artists and gallerists aged 45 to 55 years of age.

The Cooper Report’s proposed forced sale of numerous art collections from SMSFs is destructive folly. The economic and community benefits that would justify this retrospective and draconian directive are very unclear. Artworks mostly have life spans measured in many decades, if not centuries. If these collections must be sold, why not over twenty or thirty years? What is the hurry? The measure is particularly likely to cause irreparable harm to the next generation of indigenous artists.

The mandated liquidation of existing collections will be at individually born cost, not only in terms of reduced superannuation benefits for those facing retirement but also sellers fees (minimum 10%), commissions paid to agents and so on. Or If the works are transferred to some sort of approved ‘management’ there will be new, additional management costs. The retrospective nature of the directive makes the payment of these costs a Duty: a hypothecated tax.

This recommendation flies in the face of the government’s commitment to and investment in the indigenous visual arts sector, particularly the art centres. The loss of confidence in the art market as a result of the uncertainty surrounding the report is already being felt. Artists’ incomes – especially for those artists who depend on the sale of their artworks for their incomes – are already being impacted upon.

Over the past few years government policy affecting the visual arts has, far too often, been shaped by advice and recommendations given by persons whose authority to speak about the realities of the sector are based solely in a lack of curiosity.

As reported in The Australian newspaper, Cooper review panelist Meg Heffron was quoted as saying that “the panel did not take the art sectors concerns into consideration because its task was to review the superannuation industry and not all the industries around it”. On the contrary, it is definitely the task of government to take the concerns of the whole community into consideration. I urge you to reconsider this uninformed and harmful recommendation as soon as possible.

Yours sincerely

John R Walker

Artist