Local artists are calling for a mandatory warning label for Aboriginal and Torres Strait Islander 'style' art to go even further.
New England-based Aboriginal artist Tania Hartigan said the Productivity Commission's plan to sign knock off products is "a bit back to front."
The proposal would see a label slapped on Aboriginal and Torres Strait Islander art which is not authentic.
"It'd be like saying they're going to label any meat that has foot and mouth [disease], and then you can choose not to buy it," Ms Hartigan said.
"You just wouldn't sell it to start with.
"I think if something's not authentic, then it should not be allowed to be sold."
The Productivity Commission's draft report tackling inauthentic Aboriginal and Torres Strait Islander visual arts and crafts aims to give traditional owners greater control over cultural assets.
The report found inauthentic products can dent consumer confidence and crowd out real products, leading to lost income opportunities for artists.
It's a huge problem across the country, Two Rivers Tamworth and CEO of Aboriginal Regional Arts Alliance Lorrayne Fishenden said.
She said the report is just the beginning of change needed in the industry.
"I think it's a start, but I just think they should ban it," she said.
She said it's predominantly dot art that is sold inauthentically, which does not represent the various different styles across regions.
"When you look at the stuff that's being sold in these souvenir shops, it's all dot work, which is more central desert," she said.
"What they're doing is they're taking our ancient culture and making it in another country and then importing it and selling it as authentic.
"And it's fraud."
The proportion of inauthentic products on the market is increasing, the report found.
Sales of Aboriginal and Torres Strait Islander visual arts and crafts reached about $250 million in 2019-20, including $30-47 million in artwork sales through art centres and at least $83 million in sales of merchandise and consumer products - mostly souvenirs.
International visitors spent about $78-$88 million on souvenirs, and 55-61 per cent was for inauthentic products in 2019-20.
Since 2012, sales of artworks through art centres have more than doubled to over $30 million in 2019-20.
Ms Fishenden said selling authentic art through centres is a model that does not work in every state, and she hopes that is recognised.
The best place to get authentic local art is at a market, she said.
"When they're buying from commercial galleries, and bigger centres, a proportion of that goes to those galleries," she said.
"Whereas by buying direct through a market, you are buying direct off the artists, and they're getting all the money, which is a really good bonus.
"Until there's legislation bought in to ban [inauthentic art], it'll always be a problem."
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