The arts and entertainment industry has been one of the hardest hit by the COVID-19 pandemic. The industry has suffered immensely because of lockdowns, restrictions, border closures and social distancing requirements with thousands of events shut down overnight resulting in huge financial and jobs losses.
The Morrison Government has been slow to respond to calls for support from the industry. It took several months to roll out emergency funding after the industry was shut down overnight in March 2020 and there is yet to be a comprehensive industry support package that deals with the many issues the industry is facing, including the inability to get insurance.
The Australian Greens introduced the Live Performance Federal Insurance Guarantee Fund Bill 2021 as a private member's bill in response to the overwhelming requests from the industry for government support to address the market failure in the insurance industry.
The Australian Greens and Australian Labor note that there was significant support for this bill from submitters to this inquiry and those who appeared at the public hearing. There is near unanimous support from businesses across the arts, entertainment and live performance industries for a government support live performance insurance guarantee.
In the majority report, the committee acknowledged that the past two years have been an extremely difficult time for the arts and entertainment sector. Such an acknowledgement requires action from the parliament and the government to support this important industry.
Long road to recovery for the live events industry
Mr Dean Ormston, Chief Executive of APRA AMCOS, told the committee that it will take the industry a long time to get back on its feet:
While there is talk and enthusiasm about the economy reopening once 80 per cent vaccination targets are reached, snap lockdowns and ongoing restrictions on large gatherings mean that the live music and entertainment industry will continue to be held back from returning to work. A vaccination rate of 80 per cent is no magic bullet for the live music sector, because we tour, cross borders and rely on people gathering at concerts, festivals and live music venues.
Singer-songwriter Mr Pete Murray highlighted to the committee the fear for the future that is felt by many in the industry:
I'm nervous about the future of where we're going. So for my band members and my crew, the guys that need this work from day-to-day, that's gone for them. There's a lot of fear about where we can go and what we can do. Like I said, at the drop of a hat things can change.
Market failure in insurance industry
Mr John Watson, representing APRA AMCOS and Eleven Music, told the committee that there is a market failure when it comes to insuring live events against COVID-19 outbreaks, border closures, lock downs and last-minute cancellation:
The problem that we have is that those risks are uninsurable risks, so there's a market failure at the moment because you can't buy insurance against a COVID cancellation and you can't buy insurance against a closed border. Those are things which require a national approach because our touring is national, while the restrictions might be state based. It doesn't really help if you can go ahead with your gig in New South Wales but your drummer can't get in from Victoria or Queensland.
Ms Evelyn Richardson, Chief Executive of Live Performance Australia, also told the committee that there is a market failure when it comes to insurance for the live performance industry:
Prior to COVID, insurance costs for event organisers were already significant. In commercial theatre, these costs ranged from $50,000 to $1 million per production, to cover a range of circumstances. For concerts and festivals, these costs typically ranged from $10,000 to $750,000, for large‑scale concert tours and major festivals, for cancellation insurance. The inability to insure is a major market failure, and there is a role for governments to intervene.
National problem that requires a national response
Ms Julia Robinson, General Manager of the Australian Festivals Association, told the committee that a nationwide support package is required:
Specifically, we're now seeking a coordinated nationwide package from the state and federal governments for event disruption insurance that covers against COVID lockdown disruption, designed with industry, with the objective of giving certainty to commence planning live events for the 2022-23 seasons. While state-based options can offer some local solutions, the fact is this is an industry built on a national touring model. Even if a festival only has local artists on its bill, those artists are likely to be part of a wider touring circuit that eventually ties into a national story. This is also the case for the really important suppliers and the workforce who put the festivals on.
Insurance for climate change related risk
The committee also heard evidence that the arts and entertainment industry also requires government support for insuring events against the risk of cancellation due to climate change related weather events, such as bushfires and floods. Mr John Wardle from the Live Music Office told the committee:
Item 2 of the bill suggests that the scheme be specific to impacts from the COVID-19 pandemic. We would like to see it also be available for climate change, extreme weather events, bushfires. We know that 2019 saw a huge number of events cancelled due to floods and bushfires. If we had this type of scheme available, it would futureproof our industry past the initial COVID experience we're having now.
Australian Greens and Australian Labor's view
The Australian Greens and Australian Labor believe that the inability to insure live events against COVID-19 related cancellations is a market failure and that, in the event of such a market failure, it is the role of government to step in and provide support to our important industries.
The live performance industry is built on touring events across the country; it is a truly national industry and the problems that are faced require a national response. That is why there is a role for the federal government to provide an insurance guarantee for the arts and entertainment industry.
A Live Performance Insurance Guarantee Fund, underwritten by government, is the only way to bring confidence back to the industry to start planning live events again. This is a crucial step in our COVID-19 recovery so that audiences can once again enjoy live arts and entertainment events.
The live entertainment industry is important to the Australian economy. The committee heard that the industry generates an estimate 122,000 full-time equivalent jobs and contributed an estimated $36.5 billion to Australia's economy pre-COVID-19 in 2019. This dropped to just $12.8 billion as a result of COVID-19 restrictions.
Recommendation
The Australian Greens and Australian Labor recommend that this bill be passed.