Senate Inquiry into the impact of the 2014 and 2015 Commonwealth Budget decisions on the Arts

Committee Secretary
Senate Legal and Constitutional Affairs Committee
Parliament House Canberra ACT 2600
legcon.sen@aph.gov.au

RE: Submission by The Music Trust to the Senate Inquiry into the impact of the 2014 and 2015 Commonwealth Budget decisions on the Arts

Richard Letts, July 15, 2015

Dear Secretary

Thank you for the opportunity to make a submission to this Inquiry.

The Music Trust is a national organization which works to advance Australian music and musical life through provision of information, research, advocacy and special projects. Its activities are guided by a distinguished Advisory Council of 20 persons. Its Director, Dr Richard Letts AM, is a former President of the International Music Council, founder of Music Australia, one time Director of the Music Board of the Australia Council and Director of organisations in the USA.
To assess the decisions to reduce funding through the Australia Council to all grantees except the major performing arts organisations, and to transfer some of these funds to a new program controlled by the Minister for the Arts, they should be set against a conception of government’s role with regard to the arts. C0mmonwealth governments have given various formulations, including in the objectives under the Australia Council Act, and a current interpretation in the Council’s 2014 Corporate Plan, endorsed but in practice inhibited by this Minister. We suggest the following.

• The overall purpose is to foster a dynamic artistic culture reflective of our time and Australia’s cultural diversity, in which artists are supported in producing the best possible work and the entirety of the populace is enabled to participate and benefit.
• Government policies should reflect and support the advancement of the practice of artists.
• Government policies should enable the broadest possible access by the public to the arts, both as consumers and creators
• Accordingly, subsidies should be directed:

o To making possible the production of work of high artistic value which probably cannot be financially self-sufficient and therefore is unlikely to be produced without subsidy
o To enable public access to such art at a generally affordable price
o (The above should be distinguished from industry assistance to artistic production which already, or potentially, is profitable.)

• Government support, both regulatory and financial, should be framed overall to seek excellence, breadth and balance.

We address the terms of reference one at a time, in their sequence.

a. the impact of the 2014 and 2015 Commonwealth Budget decisions on the Arts; and …

Major organisations supported through the Australia Council have had their core funding sustained and will have available additional funds from the Ministry for the Arts.

All other present and potential grantees have access to an Australia Council funding pool that has been halved. Some of those funds will be available to those candidates through the Ministry but at this time, the amount is unknown. The quality of the Ministry’s assessment and decision-making is also unknown but we can see that it will lack the care and thoroughness found in the Australia Council processes (e.g. assessment will be made by a small number of bureaucrats instead of a large number of variously skilled artist-peers). It is likely that some organisations will have to close. Activities of this sector in eg innovation, artistic risk-taking, training, will be curtailed.

While the Minister has implied that his new fund will pursue excellence (his statements and actions suggest that by excellence, he means especially excellence in heritage performing arts), his policies lack breadth and balance.

b. the suitability and appropriateness of the establishment of a National Programme for Excellence in the Arts, to be administered by the Ministry for the Arts,

The Minister can, at will, direct the Australia Council in policy matters. Further, the Australia Council must present each year a corporate plan which requires endorsement by the Minister (a new requirement instigated by the Labor government that strengthens the Minister’s powers). The Minister thus has at least the same powers in policy direction with regard to the Australia Council as he does with his own Ministry.

However, he may not direct the Australia Council in the funding of any individual applicant whereas in effect, he can decide any individual grant made with funds administered by his Ministry. It is true that in this case there are procedures to be followed but it seems to us that they would rarely be a decisive impediment to the Minister’s will. One would have to conclude therefore that this expansion of the Minister’s prerogatives could be the purpose in moving funds out of the Australia Council and into the Department.

This implication is further strengthened by the fact that in the Senate Estimates hearing of May 27, the Minister, while hinting at dissatisfactions with the outcomes of the Australia Council process, was unable or unwilling to specify what they were. But he did take some actions which give us a clue.

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The Townsville-based Australian Festival of Chamber Music was the focus of attention at a Senate Estimates Committee in October 2014. It had received Australia Council funding for several years but in the 2014 round had not been successful in the competition among other applicants. Dissatisfaction was expressed by the three Queensland Senators who conducted most of the discussion, Minister Brandis among them. The CEO of the Australia Council, Tony Grybowski, was examined about the process leading to this decision (Senator McDonald, chair of the Committee, was apparently unaware of the fundamentals of the legal structure of the Council and its operations). Senator Brandis expressed surprise that the Festival had not been funded since, he asserted, it is the best chamber music festival in Australia. The basis of this assertion is not known: which other festivals, to Senator Brandis’s knowledge, are serious contenders and by what process superior to that of the Australia Council did he evaluate them? Recall that in this context, the Minister is not making a casual comment but is implying that the Townsville festival should have been funded at their expense.

Examination of the Hansard will show that in this discussion it was asserted that Mr Grybowski had guaranteed to restore funding to the Australian Festival of Chamber Music. He certainly did not, nor was in a position to do so. As the Minister, Senator Brandis could have so stated but did not.

Subsequently, through its normal evaluation process, the Australia Council did make a nearly-customary grant of $50,000 to the festival.

However, the Minister from his own budget provided an additional $80,000, more than doubling its customary $60,000 grant. We do not know by what process that decision was made nor how it was justified.

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Mr Grybowski noted that the success rate of applicants to the Australia Council is between 18% and 25%, depending upon the grant category. We observe that with such a high failure rate, many highly accomplished artists simply do not apply and that many good applicants, including probably the Australian Festival of Chamber Music, are judged worthy of funding but miss out because the funding pool cannot accommodate them. Senator Brandis and other members may often be disappointed that their favoured applicants are not supported. But they do not make judgements based upon a comparison with all other relevant applicants. The solution is not to make the assessment process less expert, less fair, or more subject to the Minister’s personal preferences, but to reverse the shrinkage of funds. Instead, the Minister has exacerbated the situation.

He soon will be faced with a similar failure rate in his own “Excellence” fund. How will he manage this? Say that the decisions were made at “arm’s length” by his bureaucrats (except where a complaint fits his personal predispositions)?

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In the May Estimates hearing, the Minister’s plan to create the new fund over which he would have personal authority drew comment from Senator McDonald. “I have long had a view that, in a representative government, the government gets the criticism where arts funding is not appropriate—when in fact the government had absolutely no power whatsoever to do anything about it. [Congratulates minister.] I think it is a wonderful initiative. It means that you will respond to urgings by all elected representatives who are indeed contacted by their local constituents about it.”

So that would be the new funding paradigm. The arts would be supported by Ministerial favours to the pet projects of members. Senator Brandis did not demur.
But is this not part of the situation that statutory independence is intended to avert? To which importuning politicians will the Minister accede, and why? Will he ever choose on the basis of what is the best art, or what is best for the arts or even, what is best for that electorate? Will he choose even-handedly without regard for the political affiliation of the supplicant? Will he choose by standards wider than his own personal taste or predilections? When governments change, will the new Minister be even-handed, wise and expert?

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When the Coalition was previously in power, an entity called The Melba Foundation had an ambition to win funding of $1 million to start a record label. It probably surmised that it had no hope of getting this from the Australia Council, because the entire budget of the then Music Board was about $4 million and the amount assigned to assist recordings was less than $200,000. It put together a support group of very highly placed people and, it is said, made its case directly to the Treasurer Peter Costello. (We cannot verify that.) We do not know the details of the subsequent transactions but in due course, the then Arts Minister, Helen Coonan, bypassed the Australia Council and provided the funds. So much for arm’s length.

Legally, she could not instruct the Australia Council to fund Melba. However, she could have provided a $1 million dollar fund and directed the Council to apply it in the support of record companies releasing discs of classical music. But there were small, experienced, expert companies who were used to getting say a $10,000 grant. They would have competed and Melba, which had no track record, probably would not have been successful.

Labor terminated the funding to Melba. But Minister Brandis has just given Melba a direct grant of $275,000. Same story. Council budget for recordings, $670,000 over two years, about $40,000 per company, $10,000 per recording. Melba could have applied for the $275,000 funding but would have taken most of the recording budget for a year.

Recording is very important to music, musicians, the music industry. It is safe to assume that the then Music Board was budgeting on recording what it could afford, having balanced the competing needs and interests. Apparently, the Minister believed he knew better. But on what basis? An effect of shifting funds to the Ministry is that these careful judgements of balance in the national allocation of limited funds are bypassed in favour of, well, who knows what?

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with particular reference to:
i. the effect on funding arrangements for:

A. small to medium arts organisations

With funds available through the Australia Council for SMEs and individual artists reduced by half over the past two budgets, the Australia Council may have no choice but to terminate funding to some organisations. Although, as the Minister points out, the total funding available to the arts was not diminished by the shift to the Department, it clearly is his intention to divert funds away from their current uses, particularly with regard to individual artists and crucial core funding to SMEs.

As will be observed by many, innovation and support to Australian creators flows from the SME sector rather than from the major music organisations. We can provide some evidence about the latter. In 2014, the Music Trust surveyed the level of production of commissions, Australian works and contemporary works by Australian orchestras and opera companies. The data was collected from the online program announcements by the various companies. Read it here:
http://www.musicinaustralia.org.au/index.php?title=Australian_Orchestras_and_Opera_Companies_Programming_Australian_Works

Of the total number of performances by the major Australian orchestras, these are the percentages of performances of works by Australian composers:
9% 3% 3% 3% 2% 7% 4% 3%. So, for instance, the Sydney Symphony gave 215 performances of which 14 were of works by Australian composers.

For the major opera companies, these are the percentages:
0% 0% 0% 31% 0%. Curiously, the committed company is the Victorian Opera, which is not funded by the Commonwealth..

The point is that the companies to which the Minister is directing more funds do little to encourage, support, bring before the audience, Australian musical works and new musical invention. Similar observations have been made about the major theatre companies. The SMEs and individual artists are far more active and indeed, are pretty much left with that responsibility.

B. individual artists

The Minister apparently has stated that individual artists will not be eligible for support from his new fund. Presumably, support from the Australia Council will be reduced due to its funding cut.

Bach, Nureyev, Patrick White, Arthur Miller were individual artists. Name the orchestra, ballet company, publisher and theatre company that produced their work.

Excuse what may seem to be a digression. Minister Brandis, May 27, 2015: “But let us not forget that the major performing arts companies are the heart and soul of the performing arts sector in this country. They are the big employers of artists and arts workers. They are the people who undertake most of the touring, including the regional touring, as well as the international touring.

“They are the people who provide the performances that the great [?] audiences of Australia enjoy. As I have always said, one of my misgivings about the exclusive peer-to-peer funding model is: who represents the audience around the table? The minister, being the responsible officer in charge of taxpayers’ money, has to be the voice for audiences. What are the shows, what are the performances, what are the concerts that the audiences go to? Primarily, they go to the performances of the major performing arts companies, whether it be drama, music, opera, ballet, dance or whatever art form it may be. It is very important to remember that their interests, and therefore the interests of the great audiences and the arts public of Australia, have been protected. I am glad you support that.”

Reiterating: “What are the shows…that audiences go to?” Primarily, Brandis says, the drama, music, opera, ballet, dance presented by the major performing arts companies.

Well, no, they don’t. Live Performance Australia collects attendance data from the major performing arts companies and large scale venues and events. For instance, music’s share of the total is as follows: opera, 2.9%, classical music 4.8%, contemporary music 42.5%.

So the Minister is really speaking of the audience for the major companies and he will advocate for its interests by raising his voice in support of the shows it wants to see. Perhaps he hopes for two seasons of La Bohéme a year instead of a stingy single season. Weekly performances of Beethoven’s Fifth.
This audience speaks softly but it has a big stick: it buys tickets or it doesn’t. It is strange for the Minister to think the companies do not program with this in mind when it is so patently obvious that they do.

To take up directly the issue of the individual artist. Minister Brandis to The Australian on June 21, 2014, when he first announced his crusade for the audience: “Frankly I’m more interested in funding arts companies that cater to the great audiences that want to see quality drama, or music or dance, than I am in subsidising individual artists responsible only to themselves.” (Now he has announced that his new fund will not give grants to individual artists.)

This is an astounding statement from an Arts Minister. Of course, the individual artist must give him- or herself to their own process. But does the Minister think that individual artists have no concern for the views of the organisations that may put their work before the public, or the public reception?

But this Minister seems to have no interest in the creation of art, no sense that we are in a time of great artistic flux and invention. He likes the safety of the heritage, culled over centuries.

What we need the Minister to do is understand the entire ecology. We need to build audiences not only for the performing arts canon, but the arts of our time and place. The individual artists and small companies are the incubators, the risk-takers, the innovators, a training ground. Even the major companies acknowledge this. An informed arts minister finds ways to support audience building, perhaps for crowd-pleasers but especially for the art that finds the way forward.

C. young and emerging artists,

The Australia Council has already closed the most relevant grant category due to lack of funds.

For young artists who intend to build careers as self-employed workers, there is a very awkward time after completion of studies when they are faced with building their businesses but often are without capital.

In music, their circumstances have grown worse over recent years. For instance, record companies once would fund the initial recordings of promising young artists. Now record companies are not interested in them until they have created their own audiences through self-released and marketed recordings. The
Australia Council gave small grants that would help kick-start careers. Presumably, it has decided that in these extreme circumstances, it must give priority to established artists.

D. the Australia Council,

The Minister has stated that a reason for the establishment of his new fund is to fill gaps in the support given by the Australia Council (although he was unable to identify these gaps). By cutting the Australia Council budget and diminishing its scope, he exacerbates the problem of which he complains.

There has been no recognition in the Minister’s statements, as they are known to us, of the major changes in the Australia Council operations, with implementation this year after deep and extensive consideration far surpassing anything undertaken by the Ministry, which regardless of the talents of staff members, has little experience or time to spend. On the face of it, the new procedures will broaden the range of activities and grantees. However, we cannot yet know the outcomes of these new procedures. Even were the previous procedures too limiting, they have been replaced by quite different ones which presumably the Minister approved as part of the Corporate Plan.

Why would not a wise and knowledgeable Minister wait and evaluate the outcomes of the new Australia Council regime and then seek to make further improvements in the light of evidence? Lacking any statement by the Minister, we speculate that he actually has not applied his mind to a broad understanding of culture and cultural development but is interested rather in redirecting funds in support of his personal cultural predilections.

In the May 27 Senate Estimates session, it was stated that in order to avoid duplication, the Australia Council and the Ministry were consulting and coordinating policies. With the announcement of guidelines for the Ministry fund, it is clear that there is a large overlap, especially in strategic projects. The gaps are still not identified although by implication, one of them is the provision of major additional funds to the major companies to support touring. One can conjecture that the Australia Council would not have diverted funds for this purpose because it would be concerned with achieving some balance in the direction of its support.

E. private sector funding of the arts

Endowment funds. The NPEA guidelines indicate that funds will be applied to encouraging arts organisations to seek private support to create endowment funds from which their programs can be sustained. This strategy of providing government funds to match private donations has been used for many decades in Australia and elsewhere. The Music Trust accepts that it is an effective strategy to support an increase in arts support.

It should be noted, however, that the large organisations are far better placed than the small ones to gain private support in any form. They have expert staff employed solely to raise private funds and the richest donors, whether corporations or individuals, mostly prefer them. This scheme therefore is likely to divert more of the former Australia Council funds to the major companies.

We note also that the Minister has already taken funds from the Australia Council to increase support to Creative Partnerships Australia which, under its previous title of the Business Arts Foundation, has decades of experience in encouraging private support and sponsorship for the arts.

Creative Partnerships Australia states its purpose: We aim to grow the culture of giving, investment, partnership and volunteering, bringing donors, businesses, artists and arts organisations together to foster a more sustainable and vibrant arts sector for the benefit of all Australians. It operates the Australian Cultural Fund.

Why, given the existence and experience of Creative Partnerships Australia, is the Minister setting up a new program to be run by the relatively inexperienced Ministry staff?

F. state and territory programs of support to the arts,

We do not have the knowledge to comment

ii. protection of freedom of artistic expression and prevention of political influence,

The partial statutory independence of the Australia Council and in particular the application of the arm’s length principle with regard to decisions concerning individual applications for support are intended to protect freedom of artistic expression and freedom from political influence. These protections do not apply to decisions made by the Minister directly or through his Ministry. Even were the Minister to state a policy or practice in support of eg freedom of expression, it has no legal guarantee and could easily be revoked.

Minister Brandis has spoken frequently of the importance of freedom of expression. But when a number of artists, at a cost primarily to themselves, withdrew works from the Sydney Biennale in protest against the perceived breaches of human rights of asylum seekers by Transfield Services, which was the major sponsor of the Biennale, Minister Brandis directed that the Australia Council should not fund artists who had rejected assistance from private sponsors. In other words, artists may be free to express an opinion but are not free to act upon that opinion. This seems extraordinary. What other actions in support of held opinions would the Minister seek to curtail? How can we know how he will seek to direct, or prefer, or curtail, or omit? The impression is easily gained that this government and this Minister are strong supporters of free speech for those who agree with them. Others, not so much!

iii. access to a diversity of quality arts and cultural experiences,

Senator Brandis, May 27 Estimate hearing: “We want to spend more on developing our arts companies, which is why we have created this new fund.” He means the 28 major companies funded through the Australia Council: orchestras, opera, theatre, dance, circus (one company). This is the clearest statement of purpose to date, given not in a carefully worded policy document but spontaneously in a hearing.

The trade-off is less development of smaller companies and individual artists, and therefore far less diversity in the application of those diverted funds.
Minister Brandis has criticised former Minister Crean’s much more comprehensive arts policy for its inclusion of “instrumental” use of the arts for things such as medical or social rehabilitation. Brandis advocates the intrinsic values of art for art’s sake. (We, and we believe, Minister Crean, accept that both are valuable, and that if the arts are to take a central place in our national life, they will be found in the spread of activities included in the Crean policy.)

The draft Guidelines state: While valuing the many secondary benefits which flow from arts activities, the Program seeks to celebrate the intrinsic capacity of the arts to engage, inspire and make meaning for all Australians. This statement could be read in the light of Minister Brandis’s personal beliefs as mentioned above. Probably it means that instrumental use of the arts will not be funded.

The Music Trust supports the importance of the arts practised by the major companies but in the case of music, they are mainly the heritage arts. Minister Brandis’s direction of funds to those organisations will reduce the overall diversity supported by the government.

By contrast, the new procedures of the Australia Council are designed to support diversity in arts practice and the application of the arts – reflecting a world which is increasingly fluid and diverse. That is what artists want to do. The arts gain value when they reflect the world in which we live.

iv. the funding criteria and implementation processes to be applied to the program,

The four overall objectives stated in the guidelines are very broad and give little guidance as to the intentions of the program.

The Minister identified three areas of application of the funds transferred to his Ministry: support to international touring, to endowment funds, and to strategic projects.

International touring. The Australia Council Corporate Plan, approved by the Minister, gives very strong priority to the achievement of international recognition and success for Australian arts and artists. If the Minister had found that plan lacking, he could have sought or directed change. Instead, he has reduced the Australia Council’s wherewithal to implement the plan and is setting up a new scheme in his Ministry, in cooperation with DFAT (with which the Australia Council has long cooperated). The Australia Council appears to be excluded from these arrangements.

The Minister’s statements indicate that he intends to apply these funds to assist international touring by the major organisations; he has mentioned orchestras and the Queensland Ballet. We do not necessarily oppose such use of funds but wonder whether the funding decisions will be made on the whim of the Minister or as an outcome of a serious strategic plan. For DFAT, the arts are instrumental (that word again) to the diplomatic representation of Australia abroad; the purpose is not arts development or development of the companies. We wonder whether the decisions by the Australia Council or by the Minister will be more consequential.

The plan also will support the importation of foreign artists or art. There is merit in this idea, also, and no doubt it has been considered before but set aside because the available funds are barely adequate to support the export of Australian artists. Given the reduction in available arts subsidies, is this the time to be diverting funds to pay foreign artists?

Endowment funds. See section i E, above.

Strategic projects. The explanation of this category is as might be expected.

This sentence: “It will support projects enabling regional and remote audiences, to have new opportunities for access to a wide range of art forms” suggests one particular direction the funding may take. Elsewhere, for instance in the discussion about the Australian Festival of Chamber Music in Townsville, the Minister has indicated his interest in supporting arts in the regions (although his own funding decisions are almost totally for metropolitan projects, as is evidenced by inspection of the accounts of his Ministry).

The performing arts are more viable in the cities because the large populations provide large audiences, box office, financial viability. Citizens in the regions deserve to have full participation in cultural life but the practical difficulties must be faced. Minister Brandis’s solution appears to be to fund regional tours by the city-based major companies. This does little to develop locally-based arts activity that builds local cultural identity and competence and in which citizens, including children, can participate. We need more small, locally based companies of high quality. (A city the size of Canberra, Newcastle, the Gold Coast, even Townsville, were it located in eg Germany, would have its own orchestra, ballet, opera company, theatre company, full-time year-round. Strange that Germany, a high cost country, can do this and also sustain eg a high quality car industry.)

The guidelines state that normally the fund will not meet operational costs. While the reason is not known and possibly has to do with the low expectation for the survival of the NPEA beyond the life of the coalition government, it should be noted that core operational funding is the most difficult to obtain, usually comes from government, and is what enables organisations to build earned income and project funding. Project funding is favoured by donors who do not wish to make a serious commitment to the funded organization over time and like the excitement of association with short-term dazzling projects.

The access criteria seem excellent. The one reservation comes not from the wording of the guidelines but from the Minister’s statements about supporting the “great” audiences for the great heritage works presented by the major companies. This bias could be imposed on the access criteria and much diminish their span and effect. It could also be asked whether the fund will give access to art making as well as art consumption.

v. implications of any duplication of administration and resourcing, and

In the May 27 Estimate hearing, it was stated that the Ministry will add six positions to handle the new fund and that the Australia Council will drop 8 positions. On the face of it, there is little change in the cost of resourcing. However, these are early days and perhaps the full picture has yet to emerge.

It should be recalled that the Australia Council also has to deal with the “Efficiency Dividend” and the diversion of $2million to fund establishment of a book council. These changes may account for the fact that it will drop two more positions than are added by the Ministry.

vi. any related matter.

It seems that the Ministry intends to respond to applications for funding as they are received and to announce results quarterly. Does this mean that the entire budget could be spent by the end of the first quarter?

Thank you again for the opportunity to make this submission. We trust that it is useful to the Inquiry. Do not hesitate to contact me if you need more information.

Sincerely
Dr Richard Letts AM, Director

6 thoughts on “Senate Inquiry into the impact of the 2014 and 2015 Commonwealth Budget decisions on the Arts”

  1. Robert Davidson says:

    Such level-headed, informed, reasonable writing.

    1. Richard Letts says:

      Heavens, have I failed that badly?
      Seriously, thank you Robert. Much appreciated.

      1. Moya Henderson says:

        I agree with Robert, Dick. The situation is too deadly serious for glib, smart-arse replies. Your comment is amongst the most valuable. The Ministry should listen very carefully to everything you have to say.

        1. Richard Letts says:

          Moya, thank you. One could only hope. But with 2,300 submissions, being loaded at an incredibly low rate, the submission might not even be there to read until after the hearings are finished!

  2. We are lucky to have your voice, I hope that many other people in the industry support the submission and get vocal about the concerns you outlined. Thank you so much Richard for your efforts and loyalty to the people who want to work.

  3. Megan Taylor says:

    Thanks for doing this Richard, excellent work. It’s all so upsetting, we have worked for years for maturity in arts funding and this ignorant person suddenly puts himself up as an expert…..

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