Advocates see red over arts in super changes

TWO east coast advocates for art investment hit town this week to heighten awareness of the implications of the federal government’s recent introduction of controversial changes for art investment by self-managed super funds (SMSF).

Art consultant, curator and collector John Cruthers and Lowensteins Art Management director Evan Lowenstein were hosted by the WA chapter of the Australian Commercial Galleries Association chair, Dianne Mossenson, and have been both vocal about the impacts the legislation, which passed through parliament in July, has had on the arts industry.

Mr Lowenstein said vagaries still existed around the legislation, which inflicts arduous insurance, auditing and storage requirements on art owned by a SMSF.

He referred to what he said was the government’s inaction and indifference in response to claims from the art industry that sales in contemporary and indigenous art markets were adversely affected immediately following the initial floating of the concept of removing art from SMSFs in the Cooper review into superannuation. That recommendation was rejected by the Gillard government, which earlier this year moved to introduce the new regulations around art investment instead. 

One of the most contentious new rules is that art should not be stored on the premises of a fund’s trustee or any related party to the fund’s trustee.

“Unfortunately, this is what we are dealing with and we have tried to lobby, many times, Bill Shorten the current (superannuation) minister and (arts minister) Simon Crean … this is one of the few things in the art world that has unified everyone, Save Super Art,” he said, referring to the campaign initiated by arts advocate and accountant Tom Lowenstein and art consultant Michael Fox.

At the ACGA event, Mr Cruthers, a well-heeled art collector and consultant, outlined what he considered to be the most important elements in developing a strong art collection, regardless of the origin of the money.

“Whether people buy art from a super fund or use funds from other sources, what matters is buying in a careful, planned and intelligent way with awareness that investment is an important consideration in the whole exercise,” he said.

“By extension, this leads to one of the simple questions every collector needs to answer before starting to acquire works – where does the investment imperative sit on the range of reasons you have for collecting?”

Mr Cruthers said the most common reason for collectors buying art in his experience had been to acquire something that was beautiful, interesting and stimulating, as well as the cultural and educational elements art could have and the altruistic nature of collectors supporting artists.

“Collecting art only as an investment is generally frowned upon in the wider arts scene,” he said.

Mr Cruthers said he used five individual criteria to value works when assisting a client to acquire a piece, including, the artist, their body of work, the work being considered, the primary and secondary market for the artist’s work and the price and investment potential.