Ron Radford, the newish director of the Australian National Gallery, has come up with a not entirely logical proposal to fund its growth. He suggests that as “masterpieces go up in value at a much faster rate than shares or property,” 2% of the Government’s $16 billion Future Fund should be devoted to buying artworks to loan to his Galery. That’s $320 million.
He uses Blue Polls as his investment yardstick and points out that while it was purchased in 1972 for $1.3 M it is now worth $115 million. Which sounds pretty impressive, until you realise that if you had given the same amount of money to Warren Buffet in 1972 it would now be worth $849 million! And anyway, $320 million only buys two Blue Polls.
Still, 14% is none too shabby compared to your average superannuation fund, but if this is such a good idea, why does he need the Future Fund to provide the money? This is an opening for the boys at Macquarie Bank. Why restrict the idea to Australia? Why not float an international art fund? With a bit of financial engineering, and basing it in a country which gives tax concessions for buying artworks, the potential return to investors could probably be tweaked close to Buffetesque levels or beyond.
But then again, why should the Gallery give the idea away at all. Apparently it has 100,000 items, most of which it can’t display. Why not sell some of them to raise the money so the Gallery can purchase Masters? Or is that the flaw in the plan? While Radford pitches on the basis of what the paintings will be worth, they’re only worth that if you have an intention of selling them, and the National Gallery doesn’t appear to be a good seller at all.
So, ultimately, it’s probably just a ploy to get his hands on some part of the Future Fund. He won’t be the only one – we haven’t seen Barnaby Joyce’s ambit claim yet. That’s why many of us favour tax cuts rather than surpluses – the money’s generally safer in our pockets than the government’s. I’m happy to hold my share of the $16 billion in trust for future generations. I might even put some of it into artworks.