Michael Fox, the campaign co-ordinator for ‘Save Super Art’ has released this update on the recent Cooper Report which stands to affect the arts industry with it’s new legislation.
THE COOPER REPORT
The final Cooper Report into Superannuation was released on Monday. It contained the recommendations that Self-Managed Superannuation Funds were no longer to be allowed to invest in the Australian art market and all SMSF artwork collections were to be sold within a five-year divestment period.
Save Super Art can only concur with one of the respondents to its campaign that this represents “an oppressive and loathsome series of recommendations” which is ill-thought, lacking evidence and if carried out would result in gallery closures, loss of exhibition opportunities for artists, unemployment in the ancillary art industries and the destruction of retirement savings for thousands of Australians.
This is not an emotional argument as Jeremy Cooper would like to see it but one based on fact. Despite the hundreds of emails sent to his Panel since we commenced our campaign against his wrong-headed recommendations of April 29, which came out of the blue to the Australian arts industry, Cooper has chosen not to investigate the impact of his superannuation review on our national culture and instead has decided on a far harsher course of action than first flagged.
I have conducted interviews with both The Australian and The Australian Financial Review over the Cooper Report and these interviews will be reported in major features in their weekend editions. To give background to these features and to better understand why Save Super Art opposes these recommendations I have attached an analysis of the words the Cooper Panel used to justify their final position.
We will now be calling for a Federal Government parliamentary enquiry into the processes that led to the unjust Cooper recommendations concerning artwork investments in Self-Managed Superannuation Funds. Details of this action will be sent out shortly but in the meantime please visit:
<http://www.savesuperart.org.au> and send us a comment. Your comments will also be sent to the Cooper Panel, the Government and the Opposition.
We urge you to send an email in support of our campaign to overturn the Cooper recommendations to ban artworks from SMSFs. The seriousness of this situation was made apparent yesterday when an art consultant told me she has a client with $65,000 set aside to purchase Australian contemporary art in her SMSF but this money has been on hold since the initial Cooper recommendations were made public on April 29. Just one tangible story of lost sales and employment opportunities.
* Jeremy Cooper made a number of statements to The Weekend Australian in Michaela Boland’s article “They say art and retirement don’t really mix”. For the complete article the website link is: http://www.theaustralian.com.au/news/opinion/they-say-retirement-and-art-dont-really-mix/story-e6frg6zo-1225889668381 We note that he has yet to provide any evidence for these statements, particularly “I look at the art market and think (my emphasis) it’s got a way to go before it’s completely legitimate.”
* Brian Toohey’s column in The Weekend Australian Financial Review – “Paternalism on super destined to fail” is hereby attached. Toohey articulates many of our concerns, particularly his comment that “any libertarian element in Cooper’s review is almost entirely suffocated by its paternalism”.
* The Coalition has ruled out Cooper’s recommendations, our last email may have given the impression that they are as undecided as the Federal Government. We thank Senator Ciobo for his principled stand and look forward to further discussions with him on their arts policy, particularly a review of the resale royalties legislation.
The recommendations made by Cooper carry significant implications to the Australian arts industry and to the retirement savings of thousands of Australians. These matters are complex but are being prosecuted by their advocates through the politics of envy. Artist Ben Quilty summed it up in a comment to The Australian last week when he said a similar whack to the sports industry in this country would never be contemplated the way the arts industry has been hit.
Cutting through these politics of envy are three of the most significant implications of the recommendation to ban artworks from SMSFs:
Cooper & Resale Royalties
Imposing a five-year moratorium to divest SMSFs of artworks will penalise thousands of retirees at least 5% of the value of those artworks due to the resale royalties legislation.
SMSFs that owned artworks bought before June 9 (the start date for RR) could have sold those artworks at some point in the future and not paid RR. Because SMSFs are not defined as individuals under RR legislation, if artworks were forcibly sold or bought back by the member due to the Cooper Report they would lose their first-transfer exemption.
This would mean the next time the artworks are sold there would be a 5% RR levy applicable. Surely this is not consistent with the objective of protecting retirement savings that was the overarching goal of the Cooper Report. (Of course there will also be an inevitable loss in value of SMSF artwork collections due to the flood of works entering the market over a five-year period – what Cooper descibes as reducing uncertainty for art investors!)
The SAF Non-Option
It has been reported that some Small APRA Funds (SAFs) are looking at the possibility of accepting artwork collections from SMSFs. In my opinion if this was to occur it would only be for very large artwork collections and the type of artworks accepted would typically be of the deceased white artist variety such as Bunny, Boyd, Nolan and Norman Lindsay.
This would represent a dramatic shift from the role that SMSFs currently play in the Australian art market where they invest heavily into the contemporary and Aboriginal art sectors. It would also be at cross-purposes to the resale royalties legislation which I thought was meant to favour the living over the dead!
Cooper & Public Policy
Both Jeremy Cooper and Meg Heffron, another member of the Panel, have made public statements to the effect that their brief was to provide a report on superannuation and not to consider the impact their recommendations would have on certain industries – namely the arts.
This is like carrying out a study to build a fertiliser factory and deciding that it should go ahead even if it meant you would poison the town water!
In a similar way the Cooper Panel has abrogated its responsibilities to the Australian public by choosing to ignore the valid concerns of the visual arts industry in a single-minded determination to deliver their final report to a predetermined deadline of 30 June.
That is why we now call for a Federal Government parliamentary enquiry into the processes undertaken into both the initial Cooper recommendations and the circumstances surrounding delivery of their final report.
All the best,
Campaign Organiser, Save Super Art