Integrity Measures Rulings of 2000 and 2005

EXTRACT OF TOM LOWENSTEIN’S RECENT SUBMISSION TO THE MINISTER FOR THE ARTS REGARDING THE “INTEGRITY MEASURES” RULINGS OF 2000 AND 2005 AFFECTING THE VISUAL ARTS SECTOR

In my capacity of Executive Director of the Australian Artists Association, I am making a submission regarding the “Integrity Measures” rulings of 2000 and 2005, which affect the Visual Arts Sector.

In brief, in June 2000, the Government introduced “integrity measures” [regarding losses from non-commercial activities] which are having serious consequences for some artists. This legislation precluded artists from claiming losses from such business activities, unless they met one of four criteria: assessable income had to exceed $20,000; a profit had to be made in 3 out of 5 years; assets utilized in the business have to exceed $100,000; utilized real estate had to exceed $500,000.

Subsequent amendments enabled artists with income from other sources of less than $40,000 to offset their art business losses against this other income.

In 2005 a further ruling was issued by the Australian Taxation Office, which set the criteria to define whether an artist is “carrying on a business as a professional artist.”

It seems a travesty of justice, if an artist meets the criteria to determine that he or she is carrying on business as a professional artist, that these artists have then to meet the additional criteria mentioned above.

There is no justification in putting additional conditions on artists’ ability to claim legitimate business expenses, once they have established that they are carrying on business, as a professional artist.

The Legislation has the effect of penalizing the artists for their lack of financial success, which, I am sure, is not the intention of the legislators. The current economic situation can only add to the difficulties experienced by the artists.

Read the full submission on www.lowensteinsarts.com.au