At its peak, the market for Aboriginal art was A$26m in yearly turnover. After the Australian Federal government decided in 2007 to step in and regulate the proceedings to protect the artists as well as the buyers, the market has fallen to A$8m a year, roughly the same sales volume as 2002.
One case is too small a sample to blame regulation for stifling the market but it would appear that a series of mis-steps—or, perhaps, the accumulation of a number of different regulations all at once—has crushed the Aboriginal art market:
When the Labor federal government took the helm in 2007, it launched a full reappraisal of the indigenous arts sector: reforms were brought in to reshape the art trade, introduce higher ethical standards and reduce the pattern of profiteering at the expense of remote community painters in the desert and Top End.
Superannuation fund [retirement fund] rules for art purchases were tightened, an elaborate resale royalty scheme was introduced and a new code of conduct was devised.
The result of these measures following in the wake of the economic downturn has been a devastation. According to several leading gallerists, the value of private purchases of high-end indigenous art is at least 50 per cent lower than it was in the middle of the last decade.
Meanwhile, a growing state-funded culture bureaucracy now wields a controlling influence over remote community painting, and directs a widely disseminated non-commercial art industry with public funds.
Plunging Sales Crisis for Indigenous Art (The Australian)