Painters will suffer, says art dealer

Ever since, Ms Rohr has been a vigorous champion of the Yulparitja artists from the northwest community of Bidyadanga, and their colourful work has grown in stature around the world, commanding prices of up to $30,000.

But Ms Rohr says the federal government's resale royalty will have unintended consequences for those artists and her business.

"It's going to have an immediate effect," she said. "We will stop buying art upfront. Artists will lose sales."

From tomorrow, all artworks resold for more than $1000 will be subject to a 5 per cent royalty.

The scheme is intended to benefit artists (or their families) when their work attracts high prices in the secondary market.

Quality works by important artists appreciate in value, and prices are boosted further by commissions of up to 40 per cent.

But there are concerns about how the additional 5 per cent charge will affect the market, particularly for Aboriginal art.

Some Aboriginal art centres, such as Papunya Tula Artists in Alice Springs, pay their artists directly, so the royalty would be charged at the first subsequent sale. Wary of attracting the resale royalty too soon, some dealers say they will reduce the amount of Aboriginal art they sell.

In Broome, Ms Rohr's Short Street Gallery has about 100 suppliers, including Papunya Tula. Ms Rohr said she would suspend buying work from "resale royalty territory" until the situation became clearer.

Complicating the matter further, Ms Rohr said she occasionally paid artists from Bidyadanga upfront, potentially attracting the royalty at the next sale there as well. She describes the scheme as a "tax on art".

"In the short term, people like Papunya Tula are going to lose sales because all of us are going to step back . . . and that's the last thing I want to do," she said.

Papunya Tula manager Paul Sweeney said he had "serious reservations" about the scheme, which the Copyright Agency Limited will charge a 10 per cent fee to administer.