It would appear that a substantial number of Australians are funding their personally managed pensions with art assets. A new change in the rules designed to force those collectors to sell is causing anxiety in the Australian art market, according to Bloomberg BusinessWeek. But some of the details in the article–estimates ranging from 20 to 50% of sales are for investment purposes–are simply astounding:
Australians must set aside a minimum of 9 percent of their salaries to fund their old age. The current retirement age for men is 65. In a preliminary report in April, Cooper said he wanted self-managed funds to focus on savings rather than paintings, stamps, wine and golf-club memberships. He recommended a ban on such “collectables.”
“I don’t see what’s wrong about encouraging people to invest in art,” said Jason Benjamin, 39, a Sydney-based artist who’s exhibited for 21 years and recently sold a 1.2 square- meter work for A$30,000. “My work is expensive. It hasn’t always been. It doesn’t climb out the window one day and say, ‘I’m valuable now.’ It takes hard graft.”
The forced sale of art worth as much as A$700 million — more than the annual sales of the nation’s galleries — would flood the market and undermine a network of related professions, said Tom Lowenstein, director of Lowensteins Arts Management and a director of the Australian Artists Association, which is leading the Save Super Art campaign.[ … ]
Lowensteins Arts Management estimates there are between 20,000 and 30,000 visual artists in Australia.
Some art galleries make as much as half their sales from self-managed pension funds, said Janan Greer, chief executive officer of the Australian Commercial Galleries Association, which represents 52 galleries, mostly in the states of New South Wales and Victoria.
Australian Art Collectors Face ‘Kick in the Guts’ from Pension Plan (Bloomberg BusinessWeek)