Arts and culture

Budget Review 2017–18 Index

Dr Rhonda Jolly

Australia Council: restored funding  

There have been significant cuts and changes to the way arts funding has been allocated in recent times.[1]

In the 2015–16 Budget of the Government announced a new program, the National Programme for Excellence in the Arts (NPEA), administered by the Ministry for the Arts. Funding for this program was redirected from the Australia Council, the Australian Government’s independent arts funding and advisory body. This change was subject to criticism by many in the arts sector. One reason for that criticism was that it was feared the program arrangements would mean the Australia Council would lose its discretionary powers to make informed and accountable decisions.[2] Criticism of the new program and funding cuts prompted a Senate inquiry into their effects.[3] The inquiry recommendations included that the Government take measures to restore funding to the Australia Council and that it develop and better articulate an arts policy to encompass priorities for Arts funding.

In late 2015, partly in response to the Senate’s recommendations, the Government established a new program, the ‘Catalyst—Australian Arts and Culture Fund’ (Catalyst) which replaced the NPEA. Minister for the Arts, Mitch Fifield, stated that the purpose of the Catalyst program was to support Australian arts and culture by complementing existing mechanisms, such as the Australia Council. [4]  Under the renamed program $32.0 million in funding was returned to the Australia Council.[5]

In March 2017 the Minister announced that Catalyst will be discontinued and the majority of its funding restored to the Australia Council.[6] In making this announcement the Minister praised the successes of the program ‘in supporting a broad range of arts projects’. He added, however, that the Government had listened and responded to feedback from the Department of Communications and the Arts, the Australia Council and the arts sector in making the decision to revise the direction for arts funding.[7]

The Minister declared that the Government’s new funding arrangements would allow the Australia Council to support small to medium arts organisations.[8] According to the Minister, it would also provide scope for the Council to address recommendations from a recent Opera Review and consider options for funding sustainability for Queensland Ballet and the Brandenburg Orchestra.[9] Funding for the major arts companies, such as Opera Australia and the Australian Ballet, made up 62 per cent of grants funding from the Australia Council in 2015–16, and it appears that the Minister intends that funding for these projects would be in addition to the support they receive annually.[10]

The Budget papers confirm that the Government will provide $92.2 million to the Australia Council over four years.[11] Of this funding, $10.0 million over two years will be provided from the Australia Council reserves. [12] Funding of $80.2 million will be returned from the Department of Communications and the Arts. The Government has indicated that this will include the returned $32.0 million previously earmarked for redirection to the Australia Council as well as $12.0 million in Catalyst funding agreements and $7.2 million for the Major Festivals Initiative and the Australian World Orchestra. No further detail of the remaining funding is available.[13]

Following the Minister’s announcement in March 2017, the Australia Council welcomed the ‘return of funding’. The Council said the policy change represented ‘a positive long term change for the Australian arts sector’.[14]

Some in the arts community are not as enthusiastic about the changed direction for arts funding. Arts academic Jo Caust has argued that the Australia Council lost $103.8 million under the previous arrangements and the revised arrangements do not fully compensate for this loss. [15] Associate Professor Caust calculates that there is most likely a shortfall of $14.0 million in arts funding.[16] She further questions what she interprets from the Minister’s statement as conditions attached to the restored funding—that it should be used to fund major arts companies like the Australian Opera. She considers the funding should be focussed on individual artists and the small to medium arts sector—the areas which she feels ‘felt the major impact of the original cuts’.[17]

Live Performance Australia (LPA), the peak body for Australia’s live performance industry, is pleased that this Budget ‘has repaired some of the damage done to Australia’s performing arts sector’, but it qualifies this support by making a point which echoes Caust’s criticism.[18] According to LPA’s Chief Executive, Evelyn Richardson, ‘the harsh reality is [that] cuts and uncertainty inflicted on small to medium performing arts companies over the past few years have already taken their toll’, with a number of companies de-funded by the Australia Council being forced to re-evaluate their staffing and delivery of artistic programs.[19] In Ms Richardson’s view, for some small to medium companies the restored Australia Council funding is ‘too little too late’.

There is no legislation required to return the funding to the Australia Council.

Cultural Institutions: additional support

The Government has announced that it will provide $48.5 million over three years to support Australia's national cultural collections. Funding will be made available through the Public Service Modernisation Fund.[20] The agency sustainability measure of this fund provides $129.6 million over three years to help agencies transition to ‘more modern and sustainable operating models.[21]   

The cultural support measure provides additional funding of $8.2 million over four years to assist national cultural institutions to deliver online initiatives, education programs and new exhibitions.[22] Institutions which will benefit are the National Gallery, the National Museum, the National Portrait Gallery, the Australian National Maritime Museum, the National Film and Sound Archive and the Museum of Australian Democracy. (In the 2017-16 Mid Year Economic and Fiscal OutlookDecember, the Government announced $20.4 million from the Public Service Modernisation Fund to the National Library of Australia (NLA) and the Australian War Memorial: $16.4 million over four years from 2016-17 to the NLA for ‘digitisation of material and upgrade of critical infrastructure for its Trove digital information resource and to upgrade other critical infrastructure’, and $4.0 million over four years from 2017-18 (including $1.0 million in 2020-21) ‘to ensure that the [Australian War Memorial] can continue to deliver its core activities’.[23] )

Capital works funding has also been set aside in the 2017-18 Budget. The National Maritime Museum will receive $13.9 million for projects which include work on heritage vessels and improved disability access. The Museum of Australian Democracy will be given $13.6 million for building improvements and technology upgrades and the National Film and Sound Archive will receive funds ($3.9 million) to assist in the preservation of its collection.[24] This measure will provide an additional $8.9 million to the National Museum of Australia to enable it to establish a Cultural and Corporate Shared Services Centre that will provide services to other collecting institutions. The Government sees the rationale for this centre as producing corporate efficiencies which will allow participating institutions to focus in the future ‘on the delivery of core services and programs’.[25]

Academic Jo Caust has also commented on this measure. She concludes that the Government’s support of cultural heritage in this Budget ‘has been positive’.[26]  However, to date, there appears to have been no comments made on Budget funding or particular measures by the relevant stakeholders.

There is no legislation required to implement the cultural institutions measures in this Budget.

Producer offset

The Broadcasting and Content Reform package in the Budget will deliver savings of $6.0 million over three years from 2018–19 by changing the conditions of the Producer Offset (a refundable tax offset payment) for films.[27] The Producer Offset is administered by Screen Australia under Division 376 of the Income Tax Assessment Act 1997 and the Producer Offset Rules 2007.

The budget measure proposes to change the conditions which apply to the so-called ‘Gallipoli clause’ in the Producer Offset.[28] The Gallipoli clause currently provides that in certain limited circumstances, some expenditure incurred outside Australia by Australian residents is recognised as qualifying Australian production expenditure (QAPE) for the Producer Offset.[29]       

The measure intends to restore the original policy intent of the Producer Offset which the budget papers say was to support the payment of Australian cast, crew and business during offshore filming. Therefore, the Gallipoli clause will be amended to specify that it only applies ‘to expenditure on payments for Australians’.[30]

Legislation will be required to amend the Income Tax Assessment Act 1997 in relation to the rules governing the Producer Offset.  


[1].          Funding cuts occurred, for example, in the 2014–15 Budget. That Budget anticipated savings of $87.1 million over four years by reducing uncommitted funding to arts programs administered by the Attorney-General's Department ($33.8 million), the Australia Council ($28.2 million) and Screen Australia ($25.1 million). Australian Government, Budget measures: budget paper no. 2: 2014–15, 2014.   

[2].          S Cannane and G Deavin, ‘Budget 2015: Changes to arts funding disastrous, says former chair of Australia Council’, ABC news online, 15 May 2015.

[3].          Senate Standing Committee on Legal and Constitutional Affairs, Impact of the 2014 and 2015 Commonwealth Budget decisions on the Arts, The Senate, Canberra, December 2015.

[4].          M Fifield (Minister for Communications and the Arts), Guidelines released for new arts fund, media release, 20 November 2015.

[5].          Ibid.

[6].          M Fifield (Minister for Communications and the Arts), New portfolio arrangements for the Arts, media release, 18 March 2017.

[7].          Ibid.

[8].          Ibid.

[9].          Ibid.

[10].       Australia Council, Annual report 2015–16, Australia Council, Sydney, 2016, p. 17.

[11].       Australian Government, Budget measures: budget paper no. 2: 2017–18, 2017, p. 72.

[12].       Australian Government, Portfolio budget statements 2017–18: budget related paper no. 1.3: Communications and Arts Portfolio, p. 50.

[13].       Fifield, New portfolio arrangements for the Arts, op. cit.

[14].       Australia Council, Australia Council welcomes funding return, media release, 18 March 2017.

[15].       J Caust, ‘After the Catalyst arts funding mess, many questions remain’, The Conversation, 21 March 2017.

[16].       Ibid.

[17].       Ibid.

[18].       Live Performance Australia (LPA), Curtains close on Catalyst but Budget fails to deliver encore performance, media release, 9 May 2017.

[19].       L Carter, ‘Jobs, careers on the line as 'Black Friday' cuts hit arts sector’, ABC news online, 14 May 2016. The online journal Daily Review also notes the effects of the Australia Council cuts in funding to small arts companies—K Sood, ‘One year after OzCo bloodbath, how are arts groups surviving?’, Daily Review, 11 May 2017.    

[20].       LPA, Curtains close, op. cit.

[21].       Australian Government, Budget measures: budget paper no. 2: 2017–18, 2017, p. 76.

[22].       M Fifield (Minister for Communications and the Arts), Additional support for our national collecting institutions, media release, 9 May 2017.

[23].       S Morrison (Treasurer) and M Cormann (Minister for Finance), Mid-year economic and fiscal outlook 2016-17, p. 140

[24].       Ibid.

[25].       Ibid.

[26].       J Caust, ‘Have the arts come out of the cold or is it another sleight of hand?’, The Conversation, 10 May 2017.

[27].       Australian Government, Budget measures: budget paper no. 2: 2017–18, 2017, p. 73.

[28].       The Gallipoli clause is so-called because it refers to the example given in the Explanatory Memorandum to the Producer Offset legislation where it is acknowledged that a film about Gallipoli may need to shoot on location in Turkey.

[29].       Screen Australia, At a glance: a quick reference to the Producer Offset, Screen Australia, 1 July 2016.

[30].       Australian Government, Budget measures: budget paper no. 2: 2017–18, 2017, p. 73.


All online articles accessed May 2017. 

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