Chapter 2
Background and key provisions of the bills
Introduction
2.1
On 13 March 2013, the then Minister for the Arts, the Hon Simon Crean MP,
launched Creative Australia: the National Cultural Policy, celebrating Australia’s
strong, diverse and inclusive culture, and describing the essential role of arts
and culture in Australian life and how creativity is central to Australia’s
economic and social success.[1]
2.2
Creative Australia represented three years of discussion and
consultation. At its core were five equally important and linked goals:
-
Recognise, respect and celebrate the centrality of Aboriginal and
Torres Strait Islander cultures to the uniqueness of Australian identity.
- Ensure that government support reflects the diversity of
Australia and that all citizens, wherever they live, whatever their background
or circumstances, have a right to shape our cultural identity and its
expression.
-
Support excellence and the special role of artists and their
creative collaborators as the source of original work and ideas, including
telling Australian stories.
- Strengthen the capacity of the cultural sector to contribute to
national life, community wellbeing and the economy.
-
Ensure Australian creativity thrives in the digitally enabled 21st
century, by supporting innovation, the development of new creative content,
knowledge and creative industries.
The Australia Council Review
2.3
On 19 December 2011, as part of the development process for Creative
Australia, the Minister announced an independent review of the Australia
Council—Australia's peak arts funding and advisory body. It had been nearly 40
years since the establishment of the Council, and approximately 20 years since
it had last been examined.
2.4
The purpose of the Review, which was chaired by Mr Angus James and
Ms Gabrielle Trainor, was to assess whether the original purpose of the
Australia Council[2]
remained relevant, and to determine an appropriate governance and
administrative model to ensure that the Council was able to:
- act on funding decisions guided by the overall principle of
excellence and artistic merit;
- have a strong and robust arms-length peer assessment process for
all funding decisions and that the decision-making process met the community's
expectations of fairness and transparency; and
-
be guided by enabling legislation that reflected the diversity of
the Australian arts and cultural sector today and, with consideration of
emerging creative areas, into the future.[3]
2.5
In addition to the consultation undertaken for Creative Australia,
the reviewers separately undertook interviews with approximately 50 individuals
and organisations and considered 2007 responses to an online survey
specifically targeting the terms of reference.[4]
2.6
The Review reported in May 2012. In general terms, it found that the Australia
Council had served Australia well—playing an important role in identifying,
nurturing and promoting artistic talent, and was staffed by highly
professional, knowledgeable and passionate people. However, the Council's rigid
structure was seen as imposing constraints on what had become a free-moving,
fluid and ever-innovative art sector—constraints that the Review recommended be
removed.[5]
2.7
The Review made eighteen recommendations across six areas that outlined
a broad mandate for change. Specifically in relation to the Council’s purpose,
the Review recommended that it be updated to ensure that the Council focussed
on funding and promoting artistic excellence in all its forms, leaving the
primary work of policy development and programs supporting broad access to the
arts to the Office for the Arts.[6]
2.8
In making this recommendation, the Review recognised the interlinked
nature of access and excellence in the artistic life cycle—that these concepts were
not mutually exclusive. It also acknowledged that the standard of excellence was
difficult to define, and highly subjective, but, as the expert funding body for
the arts, viewed the Council as well-placed to make this assessment, using
peers drawn from the sector as its decision-makers.
2.9
In relation to the governance and administration of the Council, the
Review recommended a revised, more conventional board structure with a strong
strategic and contemporary focus, clear lines of communication with the
Australian Government and mandated planning processes. It outlined a new model
for the allocation of grants which removed consideration of funding
applications along artform lines and which established and changed the way in
which applications were received, depending on needs in the sector. This
addressed a gap identified by stakeholders in relation to new and
multidisciplinary artforms, which currently struggled to fit within the
Council’s funding programs.[7]
This revised structure would retain a focus on the input of experts from the
various practice areas to inform and enrich the Council’s work. The Review
concluded:
If implemented, these recommendations are designed to firmly
establish the Australia Council as the expert body for funding work of artistic
excellence as part of a contemporary arts ecology. The reforms will deliver
flexibility to allow the Council to use its expertise to respond to needs in
the sector and to make judgements about how to structure, adapt and change the
manner in which it provides funding as the sector evolves. But the
recommendations also provide for safeguards by prescribing a more formalised
requirement for communication and planning with the Australian Government.[8]
The Bills
2.10
In launching Creative Australia, the Government accepted almost
all of the recommendations of the Review, and the Australia Council Bill 2013
and the Australia Council (Consequential and Transitional Provisions) Bill 2013
have been introduced to give effect to some of these recommendations.
2.11
The Australia Council Bill 2013 is intended to replace the existing Australia
Council Act 1975. The purpose of the Bill is to modernise the Council's
enabling legislation by:
- providing for new functions and powers for the Council to support
and foster excellence in Australian arts practice through a diverse range of
activities;
-
updating the Council’s governance arrangements to reflect the
enabling legislation of other modern Commonwealth statutory authorities, such as
Screen Australia and the National Portrait Gallery of Australia, including the
introduction of a skills-based governing board and updating of the Council’s
corporate planning and reporting requirements;
- providing the Council with the flexibility to establish
committees to receive strategic advice on artforms and the arts sector more
broadly; and
- allowing the Council to determine a new system of peer assessment
of grants applications that focuses on the needs of artists and adapts to
developments in a 21st century arts sector.[9]
2.12
The Australia Council (Consequential and Transitional Provisions) Bill
2013 contains consequential amendments and transitional provisions related to
the replacement of the Australia Council Act. In general terms, the Bill allows
the continued operation of the Australia Council during the transitional
period.
2.13
In relation to the functions and governance structure of the Australia
Council, it is useful to compare the relevant provisions of the existing Act
with those proposed in the Australia Council Bill.
2.14
The functions of the Australia Council are currently set out in section
5 of the Australia Council Act 1975 (the Act). These are:
- to formulate and carry out policies designed:
- to promote excellence in the arts;
-
to provide, and encourage the provision of, opportunities for
persons to practise the arts;
- to promote the appreciation, understanding and enjoyment of the
arts;
-
to promote the general application of the arts in the community;
- to foster the expression of a national identity by means of the
arts;
- to uphold and promote the right of persons to freedom in the
practice of the arts;
- to promote the knowledge and appreciation of Australian arts by
persons in other countries;
-
to promote incentives for, and recognition of, achievement in the
practice of the arts; and
-
to encourage the support of the arts by the States, local
governing bodies and other persons and organizations;
- to furnish advice to the Government of the Commonwealth, either
of its own motion or upon request made to it by the Minister, on matters
connected with the promotion of the arts or otherwise relating to the
performance of its functions; and
- to do anything incidental or conducive to the performance of any
of the foregoing functions.
2.15
Section 6 sets out the powers of the Council and, in addition, section
6A sets out three matters to be taken into account by the Council in the
performance of its functions and the exercise of its powers:
-
the policies of the Commonwealth Government in relation to the
arts;
-
the policies of State Governments, and of local governing bodies,
in relation to the arts, so far as it is practicable to do so; and
- such other matters, if any, as the Minister specifies by notice in
writing to the Chairperson.
Recommendations of the Review
2.16
As noted above, the Review recommended that a new purpose for the
Council be expressed as follows: 'to support and promote vibrant and
distinctively Australian creative arts practice that is recognised nationally
and internationally as excellent in its field.'[10]
2.17
It proposed that this purpose be supported by four principles, requiring
the Council:
- to support work of excellence, at all stages of the artistic life
cycle;
- to promote an arts sector that is distinctly Australian;
-
to ensure that the work it supports has an audience or market;
and
- to maximise the social and economic contribution made by the arts
sector to Australia.[11]
2.18
This purpose should also be supported by a clear statement of the
Council's functions under its legislative mandate, which would include:
- to administer and measure the impact of its funding in a manner
which achieves high accountability standards;
-
to undertake and commission research and advocate for Australian
arts to promote the sector and to better inform policy decisions; and
- to support and promote professional development and cultural
leadership in the Australian arts sector.[12]
Proposed new functions of the
Australia Council under the Bill
2.19
Clause 9 of the Bill sets out the proposed new functions of the
Australia Council:
-
to support Australian arts practice that is recognised for
excellence;
- to foster excellence in Australian arts practice by supporting a
diverse range of activities;
- to recognise and reward significant contributions made by artists
and other persons to the arts in Australia;
-
to promote the appreciation, knowledge and understanding of the
arts;
- to support and promote the development of markets and audiences
for the arts;
- to provide information and advice to the Commonwealth Government
on matters connected with the arts or the performance of the Council’s
functions;
- to conduct and commission research into, and publish information
about, the arts;
- to evaluate, and publish information about, the impact of the
support the Council provides;
-
to undertake any other function conferred on it by this Act or
any other law of the Commonwealth;
- to do anything incidental or conducive to the performance of any
of the above functions.
2.20
Clause 10 restates (and provides for some additional) powers of the Council
and, in addition, clause 11 sets out three matters to
be taken into account by the Council in the performance of its functions
and the exercise of its powers:
- the policies of the Commonwealth Government in relation to the
arts; and
- the right of persons to freedom in the practice of the arts; and
-
any matters specified in directions given under subsection 12(1).[13]
Existing governance and
administration structure
The Council
2.21
Section 9 of the Act establishes the membership of the Australia Council.
Subsection (1) provides that the Council comprises between 10 and 14 members.
Subsection (2) provides that the Council consists of:
- the Chairperson;
- the Chairperson of each Board;
- persons 'who practise or have practised the arts or are otherwise
associated with the arts'; and
- at least one 'community interest representative'.
2.22
In appointing Council members who are arts practitioners, the
Governor-General must endeavour to ensure that 'a majority of the members
holding office...are persons who practise or have practised the arts', and the
membership of the Council 'includes a reasonable balance of persons who
practise or have practised the various arts'.[14]
Boards
2.23
Under Part IV of the Act, the Minister is empowered to establish a
single co‑ordinating Board, and such number of other Boards (known as
Artform Boards) as the Minister thinks fit.
2.24
The statutory functions of these Boards are:
- to make such inquiries, and furnish to the Council such reports,
in connection with matters referred by the Council; and
- to have functions and powers delegated by the Council.[15]
2.25
The co-ordinating Board consists of a chairperson and between four and
twelve other members. Other Boards consist of a chairperson and between four
and eight other members. A majority of the members of a Board must be 'persons
who practise the arts or are otherwise associated with the arts,'[16]
and at least one Board member must be a community interest representative.[17]
2.26
In its 2011-2012 Annual Report, the Council notes the
establishment of seven Artform Boards: an Aboriginal and Torres Strait Islander
Arts Board, a Literature Board, a Music Board, a Visual Arts Board, a Dance
Board, a Major Performing Arts Board and a Theatre Board, each comprised of between
seven and nine members. These Boards are 'the principal administrators of the Australia
Council's funding role' and 'the Council's major source of advice on the
development of arts policy and grant programs':
The Australia Council has delegated the power to allocate
grants principally to the boards. In assessing grant applications the boards
may seek additional guidance in their decisions from experts listed in the
Council’s Register of Peers. Peers may be invited once per year by each board
to assist at grant assessment meetings.
Peers also provide ‘in-the-field’ assessments and general
policy advice to the boards, as commissioned. Under the Council’s Conflict of
Interest Code, board members and peers may not assess or advise on their own grant
applications or grant applications through which they would be major beneficiaries
via a third party. In 2011–12, 17 peers provided external assessments of
initiatives or performances and 41 peers participated in board and committee
grants assessment meetings.[18]
2.27
In evidence to the Committee by Mr Rodney Hall—a former Chairman of the
Australia Council—this governance structure was characterised in the following
terms:
The Australia Council structure is not, I think, clearly
understood in the public, and it is certainly not understood in the review of
the Council and the preparation of material for the bill. I think it is clear
if one can visualise peer assessment as a kind of ladder, with two uprights and
three rungs. One upright is the peer assessors, the other upright is the
professional staff, and they are connected with a rung at each level. As I look
at it, the ladder's strength comes from vertical integration. In this case, the
peer assessment panel is in touch with arts needs and practice as well as
understanding the direction the arts is taking. These panels are convened at
the first level by an Arts Form Board, which is the second level, and the board
chair at the top level, who is the chair of the council. The staff structure on
the other leg mirrors this—both vertical and horizontal connections. So it is
not a business model. It is a model specifically for the function that it
performs.[19]
Recommendations of the Review
2.28
The Review found a number of major impediments in the current governance
structure:
- the Council did not have the ability to develop a balanced,
conventional, skills-based board that served the Council’s strategic and
operational needs—in particular, the role of the chairs of each Artform Board
on the Council had inherent conflicts;
- the size of the Governing Board was determined by the number of
Artform Board chairs and not the needs of the Board;
- the credibility of the Council’s new Governing Board with the
arts sector must be balanced with the requirement for broad-based strategic
planning and policy setting; sufficient independence to reduce the potential
for conflict of interest; and broader professional expertise among its
membership;
- there was no requirement for the Council to take a formal role in
setting the strategic direction of the organisation, for example, through a
Strategic Plan;
-
there was insufficient provision for the Minister and the Council
to collaboratively engage in corporate and strategic planning processes;
- the appointment process was burdensome, with Ministerial
responsibility required for every appointment, and the Governor-General’s approval
needed to appoint the Chair;
- there was no requirement for the Minister to take into account
the organisation’s overall skill sets when appointing members of the Governing
Board, the Artform Boards or the Council’s General Manager/Chief Executive Officer;
and
- the Board currently had no formal role in the appointment of the
General Manager/CEO of the Council.[20]
2.29
Given these impediments, the Review made a number of recommendations.
First, it recommended the development of an entirely new Act for the Council,
based on the templates provided by the enabling legislation for the National
Film and Sound Archive of Australia and Screen Australia.[21]
2.30
It also recommended that the enabling legislation should provide for:
- a conventional, skills-based Governing Board of no more than nine
members, with all appointments made by the Minister after receiving advice from
the Chair, who should also be appointed by the Minister;
- this Board 'should be composed primarily of people with a deep
experience in and passion for artistic practice who can bring a balanced blend
of skills and expertise to the Council and through it, to Australia’s cultural
life';
-
this new Board should set its direction and develop its vision
with management through its strategic planning processes—Board sub-committees
(for example, Audit, Finance, Risk, Nominations) should contribute to the
governance of the organisation but not to approve funding or dictate the
Council's strategic priorities;
- Sector Advisory Panels, which would be the principal agents for
engagement with the artforms and custodians of artform practice within the
sector, should support and inform the work of the Board and management, as
directed by that Board—these Panels should provide sectoral expertise and
advise on and inform the Strategic Priorities of the Board; and
- the Board may constitute any number of Advisory Panels and
determine their mandates based on the needs of the Board in developing and
executing its Strategic Priorities, and may conclude the activities of any
Panel as and when it saw fit.[22]
2.31
The rationale for such a Board structure was put to the Committee by one
of the Review's co-authors in the following terms:
We were very clear that one of the things we were trying to
remove from the board to make it more contemporary was the representational
nature of the board, which actually meant that strategy decision-making had
inherent conflicts in it. We are not trying to remove from the board the deep
capacity to examine the arts and also policy and innovation going forward and
that was our fundamental premise for making the recommendation we made. We
believe that this cannot turn into, for want of a better description which was
pushed at us, a corporate board. It cannot be full of lawyers, accountants and
investment bankers. That would not be a good outcome. We think it can be filled
with people who have some of the skills that those people provide but who are
also in the arts community themselves and have deep understanding. We are
trying to get the right mix so that we get a board that is operating truly
strategically rather than being caught in a silo mentality.[23]
2.32
In responding to this recommendation, the Government agreed:
...that the introduction of a more conventional Board structure
as recommended by the Review will assist the Council to improve its strategic
planning and governance processes, and will more appropriately meet its
long-term operational needs. This reform will be complemented by the reform of
the Council’s administrative structure as recommended by the Review. The
Government will consult with the Council regarding the appropriate skills mix
required for the new governing board.[24]
2.33
In addition, the Government noted:
- the desirability of a standard governance approach across
agencies governed under the Commonwealth Authorities and Companies Act 1997;
and
- that the use of Sector Advisory Panels 'will ensure that artform
expertise is available to advise the Council's new Governing Board and to
inform its strategic directions'.[25]
Governance and administration under
the Bill
2.34
The Bill essentially adopts the governance structure proposed by the
Review. Part 3 of the Bill establishes a Board comprising the Chair, Deputy
Chair, Chief Executive Officer and between five and nine other members. A
person must not be appointed as a Board member unless the Minister is satisfied
that the person has 'appropriate qualifications, knowledge, skills or
experience' and, in making appointments to the Board, the Minister 'must have
regard to the desirability of the Board including members who have skills,
experience or involvement in the arts.'[26]
2.35
The Explanatory Memorandum accompanying the Bill expands on these
provisions in the following terms:
Subclause 17(3) provides for a skills-based Board to be
introduced, which will provide for a mix of arts and corporate knowledge and
expertise, as recommended in the Review. Such knowledge or expertise could
include (but is not limited to) skills or experience in a range of artforms,
administration or artistic leadership of major performing arts companies,
marketing, strategic planning, corporate governance, financial, legal, or
corporate sponsorship and philanthropic expertise.
Subclause 17(4) is intended to assist readers by making it
clear that the Minister must consider the importance of having people with
skills or experience in the arts appointed to the Board of the Council, as well
as people who are involved in the arts more broadly. This includes, for
example, having arts practitioners or arts workers appointed to the Board, that
is, people with arts management or arts administration expertise.[27]
2.36
Division 3 of Part 3 sets out procedures for the conduct of Board
meetings, including voting, the making of decisions without meeting, and the
keeping of minutes.
2.37
Part 4 of the Bill deals with the establishment of committees. Subclause
31(1) provides that the Board may establish committees to advise or
assist in the performance of the functions of the Council or the Board. A committee
may be constituted wholly by Board members, or wholly by non-Board members, or
by a combination. It is the role of the Board to determine a committee's terms
of reference and the procedures it should follow. A Note to subclause 31(1)
states: 'For example, the Board may establish an expert committee of persons
with appropriate experience for the purposes of peer assessment.'
2.38
The Explanatory Memorandum expands on this provision in the following
terms:
The inclusion of subclause 31(1) will support the implementation
of the Australian Government’s response to the Review’s recommendation to
remove the obligation for the Council to establish artform boards. It is
intended that the inclusion of this measure will provide the Council with the
necessary flexibility to establish committees, including for allocating grants
based on peer assessment, and will enable the Council to maintain access to
artform specific expertise, as well as strategic advice on the arts sector more
broadly. The note in this subclause is intended to clarify that the principle
of peer assessment of grant applications is provided for in this section, and
that this will be ensured through the establishment of expert committees
comprised of persons with appropriate experience, that is, arts experience or
artform specific knowledge and expertise.[28]
2.39
The essence of the relationship between the existing provisions and the
new provisions was outlined by the Department in the following exchange:
Senator BRANDIS: Don't you think, Dr Arnott, the Australian
public, or at least the arts community, would be very surprised to learn that
what the government is bringing forward to the parliament is a bill in which we
replace an arrangement in which the artform boards' chairs have a seat around
the table, and all the arts are represented at the peak of the Australia
Council, to a position in which there is no requirement that even a majority of
the board have any background in the arts – and, strictly speaking, because it
is only something the minister has to regard as a desideratum, there is no
requirement that any of the members of the board have knowledge, skills or
experience in the arts?
Ms Foster: Senator, I think we are really, as I said,
going to the question of the function of the board, which is about focusing on
organisational performance, strategy, planning and operational frameworks, risk
management, compliance, major expenditure, financial and other reporting and
stakeholder management. That is the function of the board in the organisation.
It will be supported, in its decision-making, by a series of committees with
expertise who will be making recommendations and/or decisions on issues
directly relating to the funding of grants, for example.
Senator BRANDIS: Depending on what the board decides
and what committee structures it decides to set in place, and that will depend
on who is on the board at any given time.
ACTING CHAIR: Am I right in thinking that the boards
as described in the old act are being replaced by the committees in the new act
– as they are described in the original, the Australia Council Act 1975.
It talks about membership of boards. I think the council creates the boards in
a similar way to the way the board will be establishing committees under the
new act.
Ms Foster: That is correct.[29]
2.40
Chapter 3 of this Report will discuss in detail the issues raised before
the Committee in relation to the changes outlined above.
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