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1301.0 - Year Book Australia, 2001  
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PUBLIC FUNDING OF THE ARTS IN AUSTRALIA - 1900 to 2000

Professor David Throsby

David Throsby is Professor of Economics at Macquarie University in Sydney. He holds Bachelor's and Master's degrees from the University of Sydney and a PhD from the London School of Economics. His current research interests in the economics of art and culture include the economics of cultural heritage, the interface between economic and cultural policy, the economic situation of individual artists, and cultural sustainability. He is a former President of the Association for Cultural Economics International and former Chair of the National Association for the Visual Arts.

Footnote: With the usual caveat, I am grateful to Adriana Vanden Heuvel, Theo Neumann and Graeme Thomas at the National Centre for Culture and Recreation Statistics of the ABS in Adelaide, and to Hans Guldberg and Warren Woodward, for facilitating access to data.


INTRODUCTION

During the twentieth century governments in most countries of the industrialised world became significant patrons of the arts. For some this was an extension of an already established role; for others it was something new. The timing and nature of these developments varied greatly from country to country, as did the formal structures for delivery of the support provided. In Australia, public-sector arts funding of the sort which is in place today is little more than thirty years old, although government involvement in some types of cultural support, such as provision of finance for public libraries and art galleries, dates back into the nineteenth century. In this article we trace the development of public funding of the arts in Australia from Federation to the present day, looking at the statistical picture, at the underlying motivations of governments and at the evolution of policies towards the arts over this period.

A prior question involves defining what comprises the arts for the purposes of this analysis. Although the traditional designations of artforms-literature, visual arts, music, theatre and so on-provide an initial working definition, there are still many uncertainties about where boundaries lie. If, for example, the arts are defined as those areas of concern to the Australia Council, the Federal Government’s arts funding agency since 1975, the focus is turned principally on professional rather than amateur practice within artforms, and also largely excludes commercial activities such as rock and pop music. The picture is further complicated by the recent development of the concept of the 'cultural industries', a development that has been prompted both by an increasing interest in the economics of the arts and culture, and by the need for a systematic way of conceptualising cultural activity for purposes of data collection and analysis. The coverage of the cultural industries as they are now construed extends well beyond the arts to include a range of activities producing goods and services with some cultural content, including broadcasting, newspapers and magazines, architectural services and so on. Nevertheless, in these constructions the creative arts can still be seen as a core component, the principal source of creative ideas which emanate outwards from the primary artforms.1

For the purposes of this article, we shall define the arts as a set of artforms covering literature (including creative writing of nonfiction); the visual arts and crafts; the performing arts, comprising theatre, music, dance, opera and music theatre; film and video (including both drama and documentary); and multimedia arts. Our coverage also includes art galleries, as the principal means of conveying the visual arts to the public. However, we do not include libraries; even though they are an important means by which literature is made available for public consumption, libraries also have an equally or more significant role as information service providers and, in terms of public funding of the core arts, it would lead to overstatement of funding levels if support for libraries were included. Also, we exclude education and training in the arts even though some institutions such as the National Institute of Dramatic Art do produce some primary creative work; museums (other than art museums) even though some multi-purpose museums do display artworks; and broadcasting and publishing even though, for example, the television services do produce original drama.

It is apparent that in any definitional exercise involving the arts, there are going to be difficult decisions as to inclusion or exclusion, and that no boundary line around the arts is ever going to be watertight, especially when it comes to allocating activities to classifications for statistical purposes. Nevertheless the conventions adopted here do provide a reasonable coverage of the core arts activities in Australia which have been the focus of public funding over the period studied.

The paper is organised more or less chronologically, covering three broad periods. The first extends from Federation to the end of the 1960s, a period over which support for the arts was virtually nonexistent. The second stage covers the rapid expansion of arts funding during the 1970s and 1980s, during which time the economic importance of the arts became more widely advocated. Finally, the decade of the 1990s was one in which only moderate expansion occurred, despite some significant advances in the articulation of cultural policy. This last period also corresponds with the time when a framework for the classification of cultural statistics was gradually put in place, providing more detailed data about the arts than had ever been available before. The paper concludes with an overview and review of some of the motivations for arts support that have been expressed, and policy developments that have occurred, over the period studied.


The early years: 1900-19682

It is sometimes supposed that public funding of the arts in Australia is an entirely modern phenomenon. In fact, the very first recorded example of government patronage of the arts in this country dates back to 1818-19 when the poet Michael Massey Robinson (1744-1826) was granted two cows from the government herd “for his services as Poet Laureate”. Posterity has not been kind to Mr Robinson’s verse, which is now largely forgotten, but he can claim a place in history as the first recipient of an arts grant in Australia.3

At the time of Federation, when the present story starts, governments in the various States had already entered the field of support for culture through their contributions to funding of public galleries, museums and libraries in the capital cities and in the rural areas. The major public art galleries in Sydney, Adelaide and Hobart, for example, had been founded in 1871, 1880 and 1887 respectively. By the end of the first decade after Federation, the six capital-city art galleries were all well established, and were drawing significant numbers of visitors. The National Art Gallery of New South Wales in Sydney reported about 250,000 attendances in 1908, the Art Gallery at Adelaide recorded about 130,000 visitors in that year, and the Queensland National Art Gallery about 40,000. Given the urban populations at the time, these were impressive figures, and were achieved with only modest amounts of public funds; for example, the annual government grant to the Sydney gallery at that time was about 4,000,4 while that to the gallery in Perth, whose foundation stone had been laid in 1901 in a building shared with the Library and the Museum, was only 1,000.

Most of the galleries had also benefited from private patronage through the donation of funds and the bequest of collections of artworks. The Adelaide Gallery, for example, had financed its new building, opened in 1900, by means of a bequest of 25,000 from Sir Thomas Elder (equivalent to about $2.5m today). The National Gallery in Melbourne - incidentally, the only one of the State art galleries to retain its appellation of 'national' to the present day - received a substantial bequest in 1904 from Alfred Felton, which by 1915 was yielding the handsome sum of 8,000 per annum. Nevertheless, despite the generosity of many benefactors, the State budgets remained the primary source of funding for the public art galleries throughout the period under review, and the amounts involved increased significantly as the galleries’ collections grew in breadth and depth and the range of their activities expanded. By the late 1950s the expenditure of the Melbourne gallery had grown to almost 70,000 per year, the Art Gallery of New South Wales’ annual expenditure was more than 46,000, and that of the Adelaide and Hobart galleries was around 22,000 each.5

Turning to the funding of individual artists during this first period of our coverage, we may note that the State galleries provided some indirect support for painters and sculptors via the acquisition of their works, and some visual artists benefited from the commissioning of portraits and the purchase of paintings by the Federal Government, acting on the advice of the Commonwealth Art Advisory Board established in 1912. But for the origins of direct grants to artists we must look elsewhere. The first formal program for funding individual artists in Australia was the Commonwealth Literary Fund (CLF), set up in 1908 by the Deakin Government to give financial assistance to writers. Originally it was a 'compassionate fund', providing literary pensions for aged or infirm authors, for the families of 'literary men' who died in poverty, and for writers unable for financial reasons to continue their activities. The Fund continued to operate through the early decades of the century, and in 1939 was greatly enlarged; while retaining its function as a source of literary pensions, it was extended to encourage the development of Australian literature and to foster appreciation of it, through the provision of fellowships for writers, assistance with publications, and the funding of public lectures. From then on it was administered by a small committee chaired by the Prime Minister of the day, assisted by an Advisory Board. At the time of its demise in 1973, when it was replaced by the Literature Board of the Australian Council for the Arts, the CLF’s budget had grown to about $250,000 annually. Over its long lifetime, it had supported many notable Australian writers and their families, including Henry Lawson, Frank Dalby Davison, Mary Gilmore and Vance Palmer.6

It was not until the 1940s that consolidated and more wide-ranging programs of public support for the arts began to be contemplated in Australia. In the decade following the end of the Second World War, three important developments occurred. First, during the War, the British Government set up a Council for the Encouragement of Music and Arts (CEMA) in the UK, the forerunner of the Arts Council of Great Britain. It provided a model for a similar organisation to be established in Australia in 1943, which became the Arts Council of Australia (NSW Division), established with a grant of 600 in 1946 from the NSW Department of Education. The Council was a private body intended to “bring art in all its forms to the people”; it believed that “art, in the widest sense of the word, is not a luxury for the few, but a necessity for all”.7 Divisions were subsequently formed in other States and a Federal Council was established in 1964. It continued to be funded through the State Education Departments, and its focus was strongly on decentralisation of the arts to country centres and schools.

The second development was the setting up of the Australian Elizabethan Theatre Trust (AETT), begun in 1954 to commemorate the visit to Australia in that year of Her Majesty Queen Elizabeth II and initially financed with a government grant of 30,000 together with private contributions of 90,000. The AETT presented drama, opera and ballet throughout the Commonwealth, and was funded via annual grants from Federal, State and local governments, and from subscriptions and donations. It played an important role in the 1950s and 1960s in encouraging Australian drama. It was also the forerunner of most of the country’s major performing companies: the Elizabethan Trust Opera Company, begun in 1956, which became the Australian Opera in 1969; the Australian Ballet which presented its inaugural season in 1962; the Union Theatre Repertory Company (associated with the University of Melbourne) which became the Melbourne Theatre Company; and the Old Tote Theatre Company (University of New South Wales), which became the Sydney Theatre Company (these two theatre companies becoming the two principal State drama companies). By 1967, Commonwealth funding for the AETT had reached almost $1m.

The third significant advance in the immediate postwar years was the establishment of the State symphony orchestras within the Australian Broadcasting Commission. The first was the Sydney Symphony Orchestra, set up in 1946 with a complement of 72 full-time players. By 1950, when the West Australian Symphony Orchestra was formed, all States had orchestras of their own, giving live concert series as well as broadcasts. The funding levels for these activities are difficult to identify, since the revenues and expenses associated with the orchestras simply formed part of the Commission’s overall financial operations. Nevertheless, there is no doubt that the ABC’s funding of the orchestras has been a major element in public support for the arts in modern Australia.8

Before concluding our coverage of the first period of arts funding, we should refer to film. The feature film industry in Australia flourished at various times over the period, beginning with The Kelly Gang in 1905-06, possibly the first full-length feature made anywhere in the world. Between 1900 and 1930 - the silent era - about 160 commercial feature films were produced, and a further 115 were made between 1930 and 1960. Although a National Film Board was established by the Federal Government in 1945, it and its successors were concerned with film as a medium of information, and it was not until the late 1960s that initiatives aimed at setting up means for government support for film as an artform came into being, a matter to which we return below.


The great expansion: 1968-1990

The first half of the 1970s is sometimes seen as marking Australia’s 'cultural renaissance', a period when the creative arts blossomed throughout the country as never before, thanks to enlightened public patronage. In fact, the impetus to rationalise and expand Commonwealth government support for the arts originated several years earlier. Towards the end of 1967 Prime Minister Harold Holt announced the establishment of the first Australian Council for the Arts, which was to distribute grants and to advise the government on cultural matters.9 It was set up not as a statutory body, but as a committee acting under terms of reference with nine members and a chairman, Dr H.C. ('Nugget') Coombs, who had been instrumental in persuading the government to embark upon this new venture. The Council began operating in July 1968 with a budget for 1968-69 of $1.5m, a sum which, though small by the international standards of the day, was nevertheless a considerable increase on previous levels of support.10

Following the establishment of the Council by the Federal Government, the various States moved in turn to set up their own bodies to provide cultural support within their own jurisdictions. One of the first to act in this respect was Queensland which established a portfolio for Cultural Activities within its Ministry for Education and Cultural Activities in 1968. By the mid 1970s all States had either a department, a statutory authority, or an advisory committee to handle their expanding arts funding activities. Meanwhile, at the federal level, successive Coalition governments after 1967 continued to support the Council for the Arts, together with the Commonwealth Literary Fund and the Commonwealth Art Advisory Board mentioned above, the Committee for Assistance to Australian Composers, which had been established by Harold Holt in 1967, and the Interim Committee for the Film and Television School, which was inaugurated by John Gorton in 1969. Despite these efforts, in the election campaign of 1972 Gough Whitlam was able to point to Prime Minister William McMahon’s apparent lack of interest in these areas, as evidenced by his assigning responsibility for the arts, along with Aborigines and the environment, to his most junior minister.

The Whitlam government elected in 1972 moved promptly to reconstitute the Australian Council for the Arts, rationalising the disparate collection of Commonwealth administrative arrangements noted above. The new Council comprised seven Boards covering Aboriginal arts, craft, film and television, literature, music, theatre (including opera and dance) and visual arts. Its financial allocation in the first Labor budget in 1973 was, at about $15m, roughly twice the Commonwealth’s aggregate expenditure on the arts in the previous year.11 The Council was also asked to recommend on a more permanent structure for government administration in the cultural field, and its report on this matter was adopted by Cabinet in November 1973. Legislation to establish the Australia Council, as it was now to be called, was introduced in 1974, and the Council assumed its new role as a statutory authority early in 1975. 12 Despite the ups and downs of political fortune over the ensuing quarter of a century, the Australia Council has survived as the Federal Government’s arms-length arts funding body to the present day. It has been overseen by more than a dozen Ministers, a tribute to the impermanence of the arts portfolio in the political firmament.

During the remainder of the 1970s and 1980s arts funding continued to grow at all levels of government. Table C10.1 shows the trends over this period in Commonwealth, State and local government funding for the arts, not including support for art galleries, performing arts venues, symphony orchestras, or film and video. The high initial levels of support were not maintained in real terms through the 1970s, but recovered during the following decade. The period is notable for the growth in local government cultural support. Table C10.2 indicates the distribution of arts support funds among the major artistic purposes. The decades of the 1970s and 1980s were marked by an increasing awareness of the need to support Aboriginal arts, and the dissemination of the arts in local communities also gained in prominence through the expansion of the community arts movement. It can also be seen from table C10.2 that the performing arts enjoyed the lion’s share of public funding over this period, partly because of their higher cost levels than the other art forms, and partly because large performing organisations could assert a stronger bargaining position than could individual artists such as writers, visual artists and craftspeople in the scramble for funds.


C10.1 GOVERNMENT FUNDING OF THE ARTS(a), By Level of Government, Australia - Selected Years 1968-69 to 1988-89

1968-69

1973-74

1980-81

1982-83

1988-89

$m
%
$m
%
$m
%
$m
%
$m
%

Level of government
Commonwealth
1.7
40
13.7
50
22.9
48
31.0
47
71.5
51
State and territory
2.6
60
12.9
47
20.4
43
29.4
45
50.6
36
Local
n.a.
n.a.
1.0
3
4.1
9
5.0
8
17.0
12
Total (current prices)
(b)4.3
100
27.6
100
47.4
100
65.4
100
139.1
100
Total (1998-99 prices)
(b)31.4
. .
145.5
. .
116.9
. .
130.8
. .
183.0
. .
$ per head (1998-99 prices)
Real funding per head
(b)2.56
. .
10.60
. .
7.83
. .
8.50
. .
10.90
. .

(a) Not including government expenditure on art galleries, performing arts venues, symphony orchestras, or film and video.
(b) Not including local government.


Source: Derived from data in Australia Council, The Arts: Some Australian Data (Sydney: Australia Council, 1982); Hans Guldberg, Cultural Funding in Australia: Federal, State and Local Government (Sydney: Australia Council, 1991); and Hans Guldberg, Artburst! Growth in Arts Demand and Supply over Two Decades (Sydney: Australia Council, 1992).

C10.2 GOVERNMENT FUNDING OF THE ARTS(a), By Artistic Purpose, Australia - Selected Years 1968-69 to 1988-89

1968-69(b)

1973-74

1980-81

1982-83

1988-89

$m
%
$m
%
$m
%
$m
%
$m
%

Artistic purpose
Literature
0.1
2
2.1
8
2.0
4
4.0
6
7.8
6
Visual arts/craft
1.0
23
5.2
19
6.2
13
8.7
13
20.5
15
Music incl. opera
1.1
26
10.7
39
14.5
31
18.2
28
25.0
18
Theatre, dance
1.9
44
7.2
26
15.2
32
20.7
32
50.1
36
Aboriginal arts
0.8
3
2.5
5
3.6
6
12.5
9
Community arts
0.2
5
1.6
6
7.0
15
10.2
16
23.2
17
Total
4.3
100
27.6
100
47.4
100
65.4
100
139.1
100

(a) Including Commonwealth, State and Territory and local government funding. Not including government expenditure on art galleries, performing arts venues, symphony orchestras, or film and video.
(b) Not including local government.

Source: Derived from data in Australia Council, The Arts: Some Australian Data (Sydney: Australia Council, 1982); Hans Guldberg, Cultural Funding in Australia: Federal, State and Local Government (Sydney: Australia Council, 1991); and Hans Guldberg, Artburst! Growth in Arts Demand and Supply over Two Decades (Sydney: Australia Council, 1992).


In addition to the activities reflected in tables C10.1 and C10.2, the period of the 1970s and 1980s also saw continued support by the ABC for its State orchestras, and further expansion of the various State art galleries. The other development in the visual arts over this time was the establishment of the Australian National Gallery in Canberra, whose interim Council was appointed in 1974, and whose new building was opened in 1982. It rapidly built up its collection of Australian and international art, and its federal government allocation grew from around $10m at the beginning of the 1980s to around twice that by the end.

Turning to film, we may note that the impetus for a public presence in reviving the Australian film industry, which had begun in the late 1960s, came to fruition during the period under review, first with the establishment of the Australian Film Development Corporation (AFDC) in 1970, and then with the inclusion of a Film and Television Board in the original Australia Council. The AFDC was replaced in 1975 by the Australian Film Commission (AFC) whose central function remained that of encouraging the making, promotion, distribution and exhibition of Australian films. During the mid-1980s the appropriation to support the AFC reached around $20m, and it was earning back about half this amount in revenues from its various projects. By 1989-90 the government support was around $16m, and the AFC’s earned revenue had fallen away to little more than $3m.

In addition to supporting the AFC, the Federal Government in 1978 introduced tax concessions to encourage investment in Australian films, first under Section 10B and then under the more widely known Section 10BA of the Tax Assessment Act. These measures were complemented in 1988 with the establishment of the Film Finance Corporation (FFC), set up as an avenue for providing a more direct means of government support for film investments. The 10BA arrangements in their initial form proved so attractive to investors that by 1984-85, for example, the total value of film budgets secured through this means exceeded $180m, at a cost to government revenue in the following year of around $125m (or $225m at 1998-99 prices). This level of indirect support for the film industry was well in excess of the total amount of direct support provided by the Federal Government at that time for all the other arts combined.13


Modern times: 1990-2000

In 1985 the Cultural Ministers Council set up a Statistical Advisory Group with membership from the Commonwealth and all States. In 1987 the Group commissioned a study to develop a National Culture-Leisure Industry Statistical Framework. The framework was to be based on the 1986 UNESCO Framework for Cultural Statistics, and was intended to enable the ABS to rationalise and expand its collection of cultural statistics in a manner consistent with the statistical systems in use in other industry sectors.14 The reports of these studies provided in due course a basis for compiling, for the first time, a comprehensive statistical picture of funding to the arts and culture in Australia. 15 Thus we are able, in this third stage of our coverage of public funding of the arts in Australia, to call upon a reliable data source to demonstrate developments over the period. Implementation of the statistical framework led to some modifications and improvements introduced over time, so in fact it is possible for present purposes to trace a strictly consistent series back only as far as 1994-95, although with some further assumptions we can extend this data set back to 1991-92.

Table C10.3 presents the broad aggregates for the eight-year period 1991-92 to 1998-99. The total levels of arts funding shown here are considerably higher than those for the earlier period given in tables C10.1 and C10.2, because it is now possible to include expenditure on art galleries, performing arts venues, the orchestras, and film and video. Although funding at all levels of government increased at least in nominal terms over the decade of the 1990s, the relative share of Commonwealth arts funding declined as the significance of State and local government sources increased (see table C10.3). However, the distribution of funds between art forms as shown in table C10.4 remained fairly constant over this period, with literature receiving around 2-3% (recall that libraries are not included), the visual arts (including art galleries) just over 20%, and the performing arts accounting for almost half of available funds. After some significant investments in film, video and multimedia in the first half of the decade, these areas fell to just under 20% of total direct arts funding in 1998-99.
    C10.3 GOVERNMENT FUNDING OF THE ARTS, By Level of Government, Australia - 1991-92 to 1998-99

    1991-92
    1992-93
    1993-94
    1994-95
    1995-96
    1996-97
    1997-98
    1998-99

    $ MILLION

    Level of government
    Commonwealth
    208.3
    192.7
    199.6
    260.0
    228.4
    226.1
    251.2
    246.4
    State and Territory
    191.7
    187.2
    212.7
    240.1
    266.7
    317.5
    306.0
    349.9
    Local
    52.2
    61.2
    77.5
    94.6
    98.2
    125.1
    115.3
    105.0
    Total (current prices)
    452.2
    441.1
    489.8
    594.7
    593.3
    668.7
    672.5
    701.3
    Total (1998-99 prices)
    513.3
    495.6
    540.4
    635.9
    608.7
    677.0
    680.9
    701.3

    $ PER HEAD (1998-99 PRICES)

    Real funding per head
    29.34
    28.07
    30.29
    35.22
    33.24
    36.55
    36.31
    36.91

    PER CENT

    Level of government
    Commonwealth
    46
    44
    41
    44
    38
    34
    37
    35
    State and Territory
    42
    42
    43
    40
    45
    47
    46
    50
    Local
    12
    14
    16
    16
    17
    19
    17
    15
    Total
    100
    100
    100
    100
    100
    100
    100
    100

    Source: Derived from data contained in Cultural Ministers’ Council, Cultural Funding in Australia (various years); Hans Hoegh Guldberg, The Arts Economy: 1968-98 (Sydney: Australia Council, 2000); and data supplied by National Centre for Culture and Recreation Statistics, ABS, Adelaide.


    C10.4 GOVERNMENT FUNDING OF THE ARTS(a), By Artistic Purpose, Australia - 1991-92 to 1998-99

    1991-92

    1992-93

    1993-94

    1994-95

    1995-96

    1996-97

    1997-98

    1998-99

    $m
    $m
    $m
    $m
    $m
    $m
    $m
    $m

    Artistic purpose
    Literature and publishing
    15.1
    14.3
    13.7
    13.6
    15.5
    14.5
    16.8
    17.3
    Visual art, craft, photography
    22.0
    20.6
    25.4
    26.2
    31.4
    28.7
    29.6
    29.8
    Art galleries
    92.9
    74.9
    87.1
    109.6
    119.6
    122.9
    121.8
    129.5
    Music (excl. opera)
    28.7
    25.0
    25.1
    29.2
    34.2
    40.2
    64.9
    67.7
    Theatre, opera, dance
    65.1
    72.2
    73.8
    76.8
    89.4
    89.9
    92.3
    100.8
    Performing arts venues
    83.7
    92.5
    120.9
    137.5
    134.9
    188.3
    160.8
    168.4
    Community arts
    39.3
    37.6
    44.2
    50.9
    59.6
    51.1
    57.6
    65.9
    Film and video
    105.3
    104.0
    99.6
    102.4
    106.9
    127.1
    121.2
    117.5
    Multimedia
    -
    -
    -
    48.5
    1.8
    6.0
    7.5
    4.4
    Total
    452.2
    441.1
    489.8
    594.7
    593.3
    668.7
    672.5
    701.3

    (a) Including Commonwealth, State/Territory and local government funding.

    Source: Derived from data contained in Cultural Ministers’ Council, Cultural Funding in Australia (various years); Hans Hoegh Guldberg, The Arts Economy: 1968-98 (Sydney: Australia Council, 2000); and data supplied by National Centre for Culture and Recreation Statistics, ABS, Adelaide.


    Year-by-year funding data are occasionally distorted by significant capital expenditures which occur from time to time; in a normal year, capital expenditures account for around 15% of arts and cultural funding. Illustrative data from 1998-99 shown in table C10.5 are consistent with this overall proportion, though the mean conceals some significant variations between artforms - not surprisingly, higher than average proportions of capital funding accrue to areas involving institutions engaged in capital works such as performing arts venues.


    C10.5 RECURRENT AND CAPITAL ARTS FUNDING(a), By Artistic Purpose, Australia - 1998-99

    Recurrent

    Capital

    Total

    $m
    %
    $m
    %
    $m
    %

    Artistic purpose
    Literature and publishing
    15.8
    91
    1.6
    9
    17.3
    100
    Visual art, craft, photography
    28.2
    95
    1.6
    5
    29.8
    100
    Art galleries
    110.6
    85
    18.9
    15
    129.5
    100
    Music (excl. opera)
    67.6
    100
    0.1
    0
    67.7
    100
    Theatre, opera, dance
    100.2
    99
    0.6
    1
    100.8
    100
    Performing arts venues
    100.8
    60
    67.5
    40
    168.4
    100
    Community arts
    68.8
    104
    -2.9
    -4
    65.9
    100
    Film and video
    101.8
    87
    15.7
    13
    117.5
    100
    Multimedia
    4.4
    100
    0
    0
    4.4
    100
    Total
    598.2
    85
    103.1
    15
    701.3
    100

    (a) Including Commonwealth, State/Territory and local government funding.

    Source: Derived from data in National Centre for Culture and Recreation Statistics, Cultural Funding in Australia, 1998-99.


    This article has focused on direct support for the arts by the public sector, but it is important to note that some significant private sector funding of artistic activities in Australia has also occurred over the years, as we observed earlier in regard to bequests of money and artworks to the nation’s art galleries. In the current period, private support for the arts has come via business sponsorship, which yields a payoff to the sponsor through marketing, advertising, promotion of brand image etc., and via philanthropy, where individuals, corporations or foundations donate funds without seeking a tangible return. Several schemes have been introduced by successive Commonwealth governments which provide taxation incentives to donors in an effort to stimulate the flow of funds. The positive outcome of such programs is to leverage new money for the arts; the downside for any government has to do with loss of control over the direction of this funding, and hence some potential for dilution of the strength of public cultural policy. Estimates of the amounts of funds flowing to the arts from the private sector are difficult to make; one study in the early 1990s put the amount of direct support enjoyed by the arts as a result of bequests and donations (not including business sponsorship) in 1992-93 at about $90m, or about 15% of total support.16 The cost to Treasury of such an amount, measured in terms of revenue forgone, is likely to have been around $30-40m, depending on the marginal tax rates assumed to apply.


    Rationalising public funding of the arts: 1900-2000

    Let us look back over the period covered by this article, and consider the development of the public sector’s role in arts funding in Australia over the century. What have been the motivations and intentions of government involvement in the arts over this period?

    In the early years after Federation it seems clear that the recognition of a government responsibility in matters relating to art was closely allied with the acknowledgement of its role in matters of public education. Indeed, in the first Year Book (for 1901-07, published in 1908) the expenditure on art from consolidated revenue is lumped in with that on education and science under the general heading 'State Expenditure on all Forms of Educational Effort' (p. 754). This view of the arts as being similar to education in their claim on the attention of the state persisted well into the century, and indeed is still relevant in some respects today. Nevertheless, the translation of a perceived obligation into any sort of broader government action did not emerge until after the Second World War, when notions of state support for the arts more widely began to crystallise. Although the focus of postwar reconstruction was on the re-establishment of a peace-time economy, social and cultural developments also figured in the public agenda at that time, in education, health, welfare, and so on. Even so, as we have seen, it was not until more than twenty years after the end of World War II that ideas for a more active participation by the government in support of culture began to take significant tangible form.

    The rhetoric surrounding the establishment of formal mechanisms for arts funding in the late 1960s and early 1970s pointed to the importance of the arts as a cornerstone of a civilised society. Since governments were charged with a duty to foster such a society, it followed that encouragement of both the creation and the enjoyment of the arts could be seen as a public obligation, appropriately financed out of general government revenue. Statements by politicians of all persuasions then and now suggest that, notwithstanding perceptions about the political leanings of the 'arts community' which surface from time to time, there is overall bipartisan support for such a view.17

    The decision to inaugurate a broad program of arts funding in the late 1960s required also a decision as to the best mechanism for delivery of such support. Based on the experience of other countries, it could be suggested that three alternatives were available. First, a program of tax concessions could be initiated to encourage private philanthropy towards the arts, along the lines of current practice in the United States. The cost to the public sector of such an approach would be the revenue forgone. Second, a Ministry of Culture could be established, as in some European countries, dispensing money directly to arts organisations and individual artists. Third, the arts council model could be adopted, as in the United Kingdom, where a public body independent of government could distribute grants free of direct political control.

    In the event the British model was chosen, and the resulting Australia Council has remained an independent statutory authority to the present day. Its structure reflects the twin principles of 'arm’s-length funding', where decisions are made without political interference, and 'peer review', where grants are determined on the basis of independent expert advice. Nevertheless, it has to be remembered that the importance of these two principles as a feature of arts funding in Australia has declined over the years as the proportion of total arts funding accounted for by the Australia Council has itself declined; these principles apply imperfectly, if at all, to funding through other Commonwealth avenues and via the States and local government.

    The establishment of formal arts funding mechanisms at the Commonwealth level also required a decision as to criteria for the allocation of grants. The Australia Council Act 1975, which has remained more or less intact in the intervening years, directs the Council to pursue certain goals which can be summarised as having three principal elements: the pursuit of excellence, the widening of access, and the fostering of 'Australian-ness', i.e. the responsibility to reflect Australia’s evolving national identity to its citizens and to the world. Translating these lofty ideals into operational decisions has always presented difficulties, such as when objectives of excellence and access, for example, appear to point in different directions. Nevertheless, they have remained a driving force in the Council’s work, and have provided some contextualisation for arts funding decisions made elsewhere in the public system.18

    Despite the advent of a significant public presence in financing the arts in the early 1970s, it was not long before the government’s role was put under critical scrutiny. Two important enquiries into arts funding were held in the 1970s and 1980s which focused attention on the rationalisation of arts expenditures and the means for their delivery. The first was the Industries Assistance Commission’s (IAC) enquiry into the performing arts of 1975-76. This enquiry was the first big test for the newly-formed Australia Council, which was seen by the IAC commissioners during the course of the enquiry as being elitist and unable to justify its operations in objective (i.e. economic) terms. It is ironic, therefore, that it was the Council for the Arts itself which was responsible for bringing the enquiry about in the first place. For several years the Council had been refusing requests from commercial theatre organisations for financial assistance, but had come to feel that perhaps such requests could be supported in some circumstances, and sought guidance on whether this was so. The IAC was seen to be the appropriate body to analyse the commercial industry’s requirements and the merits of its claims for assistance.19 But when the Prime Minister Mr Whitlam referred the matter to the IAC on 6 October 1974, he did so in much more general terms. The Commission was asked whether assistance should be accorded the performing arts in general in Australia and, if so, what should be the nature and extent of such assistance. Whitlam believed that an economic case could be made for public assistance to the performing arts in much the same terms as the case for education and similar activities. He considered that public support, particularly in hitherto unassisted areas, needed to be publicly examined and explained. Thus, the enquiry’s terms of reference gave the commissioners a virtual carte blanche to examine the whole performing arts industry and the government’s role in it.

    The enquiry’s report20 recommended that assistance to support the operating costs of performing companies should be phased out over the ensuing five years, and that instead funds should be directed to improving education, expanding dissemination and encouraging innovation in the performing arts. In the week after the release of the enquiry’s draft report, the Prime Minister, Malcolm Fraser, took the unusual step of rejecting its recommendations. He told the Parliament: “The Government strongly affirms its support for the arts in virtually all its forms. The Government is committed to the support of the major performing companies in Australia - the opera, ballet and drama. That will be its continuing policy.”21

    The second investigation into arts funding was that conducted by a Sub-Committee of the House of Representatives Standing Committee on Expenditure, begun in 1982 and concluded with the publication of its report in 1986.22 The Committee, chaired by Leo McLeay, reviewed the broad effectiveness and efficiency of the procedures for the delivery of Commonwealth assistance to the arts. Over the long course of its deliberations, the Committee considered ways of rationalising and coordinating the disparate means by which the Federal Government was providing both direct and indirect support for the arts in Australia. Its guiding principles were that the use of public funds demanded accountability and that expenditures should be commensurate with the benefits produced. Although, like the IAC ten years earlier, the Committee ruffled some feathers, its recommendations were by and large uncontroversial and a number of them were in fact implemented in one way or another over the ensuing years.23

    These enquiries, and the climate of 'economic rationalism' which emerged in Australian public life during the 1980s, had the effect of forcing the arts sector to become more explicit about its economic base. At the macro level, statistics were presented by arts advocates comparing the arts with other industries, showing that the cultural sector was not a minor backwater in terms of value added, employment, exports, and contribution to GDP, but rather was a significant locus of economic dynamism in the post-industrial world.24 At the micro level, economic impact studies began to appear which purported to show the significant contribution made by arts events and cultural institutions to local and regional economies.25

    At the same time at an international level the emerging discipline of cultural economics was discussing ways in which government support of the arts could be rationalised within contemporary economic systems relying essentially on private markets as the principal means of resource allocation. This long debate has had many strands, but the argument which emerged most convincingly was one proposing that the arts are a case of market failure, i.e. that the arts give rise to externalities or public-good benefits which are not reflected in market transactions and which therefore provide a prima facie justification for government intervention.26 Discussion of these issues in Australia was assisted by the fact that one of the first studies anywhere in the world which attempted to give empirical substance to these theoretical hypotheses was undertaken in this country. In a research project funded by the Australia Council and carried out in 1982, Glenn Withers and I set out to identify the nature of the external benefits from the arts and to quantify the community’s willingness to pay for arts support out of their taxes. Although limited in scope and specific to its time period, this study yielded strong support for the existence of a viable economic rationale for government assistance to the arts. Since the rationale was derived from the same basic economic paradigm which underlay the 'economic rationalist' ideology of the day, our results were helpful in aligning arts funding with the prevailing economic orthodoxy. Despite changing times, the essential conclusions of this research are still relevant today and their implications might be regarded as even more important, given the increased prominence of the same orthodoxy at the present time.27

    In 1992 the Commonwealth Government set in train a process aimed at formulating a new cultural policy. The process culminated in 1994 with the release of a document entitled Creative Nation, which at the time represented one of the most comprehensive and forward-looking statements of government policy towards culture that had been seen anywhere in the world.28 It was grounded firmly in the proposition that the creative industries could be seen as a significant force in generating employment and economic growth; indeed in the leadup to the finalisation of the document a major conference was organised by the then Department of Communications and the Arts, the title of which, 'Creating Culture: the New Growth Industries', reflected this prevailing mood.29 Creative Nation adopted a broad view of the cultural sector in which the arts occupied a central position, not just in their own right but also as the foundation upon which the wider cultural industries, especially those dependent on new communications technologies, were built. Although criticised in some quarters as being longer on rhetoric than on concrete proposals, Creative Nation reflected an optimistic and expansionist mood about Australian culture and about the future potential of the creative arts in the new information age. Despite the fact that the document itself is still strongly identified with Paul Keating, the Prime Minister under whose aegis it was produced, the thrust of Creative Nation has remained broadly consistent with the approach to arts policy espoused by subsequent conservative governments.

    In concluding our review of the policy context of arts funding over the twentieth century, let us consider some issues within the arts: What have been some of the factors affecting the distribution of funding between artforms? The first point to note is that historically funding of organisations has tended to dominate over support for individual artists. At the time the original Australian Council for the Arts was set up in 1968, the symphony orchestras and the opera and ballet companies were already well established, and the new Council saw a particular priority in consolidating and extending the network of State drama companies. The fact that the IAC enquiry of 1975-76 dealt with the performing arts continued this focus on organisational support. By the early 1980s, the artforms representing 'initial creative artists' - literature, the visual arts, the crafts - had come to feel that they were receiving an inequitable share of Australia Council funds compared with the performing arts. Their concerns led to the establishment of a Committee of Inquiry into the situation of the individual artist in Australia, which produced its report entitled The Artist in Australia Today in 1983. The report’s recommendations led to the introduction of some new measures to improve the working conditions of practising professional artists, but the hoped-for shift in Australia Council funding towards initial creative artists did not materialise. Nevertheless, the Individual Artists Inquiry did at least spawn a series of surveys of the economic circumstances of artists, conducted at roughly five-yearly intervals, which have drawn periodic attention to declining real incomes and the lack of professional recognition suffered by writers, visual artists, composers, actors, musicians and other practitioners in Australia; these studies have provided empirical support for arguments that arts policy in Australia needs to do more to address problems faced by individual artists.30

    The matter of public funding of performing companies as distinct from individual artists, and indeed of large companies as distinct from small ones, has resurfaced with the publication of the most recent inquiry into an aspect of arts funding in Australia, namely the review of the major performing organisations carried out in 1998-99 by a committee chaired by Helen Nugent. Although composed entirely of business people, the committee did not adopt a solely business-oriented approach to its task. It recognised that the essential purpose of these opera, dance, theatre and music companies is to produce art, and its recommendations were aimed at securing the economic foundations on which those processes are built.31 The result has been the injection of significant new funds (about $43m in Federal funding over four years) to support the major performing groups. Not surprisingly, there have been calls for similar attention to be paid now to the needs of smaller companies and of artforms outside the performing arts.


    Conclusions

    In tracing the development of public funding for the arts since Federation, we can see some patterns emerging which give a lead to likely directions in the new millennium. First, the consolidation of the public sector’s role in arts funding which has occurred during the last quarter of the twentieth century now seems secure, and it is unlikely that that role will disappear. Second, however, the way in which it is discharged may well go through furthur transformations. In part these will be caused by technological change, as new means for production, dissemination and consumption of art affect the ways in which the public interest in this field can or should be asserted. In part also these transformations will arise through changing partnerships in the delivery of arts support between public and private sectors. Furthermore, shifts between levels of government are likely to occur, with the possibility of a further relative decline at the centre and increased involvement at the periphery; if so, this would be consistent with an apparent worldwide trend towards greater cultural diversity and more active expression of localised cultural values, especially in the face of what are seen as the homogenising influences of globalisation.

    Finally, whatever the ebb and flow of political fortunes at the federal level in Australia, it is likely that a broad-ranging Commonwealth government cultural policy will evolve further in the years ahead, necessarily containing as one of its elements a specific stance towards public support for the arts. If so, there seems little doubt that such an arts policy will continue to be predicated on the threefold objectives noted earlier - a drive for the highest possible standards in artistic creativity, innovation and expression; an opening up of enjoyment of the arts to as wide an audience as possible free from economic and locational barriers; and a further enhancement of the arts’ unique role in defining what it means to be Australian.


    Endnotes

    1 For further discussion of the cultural industries as a series of concentric circles centred on the arts, see Richard E. Caves, Creative Industries: Contracts between Art and Commerce (Cambridge: Harvard University Press, 2000), and David Throsby, Economics and Culture, (Cambridge: Cambridge University Press, 2001), ch. 7.

    2 Unless otherwise stated, statistical information in this section is derived from the Commonwealth Year Books of various years, beginning with No. 1 for 1901-07, published in 1908. Throughout this paper, financial amounts are quoted at current prices, unless indicated otherwise. Constant price series are expressed in 1998-99 prices, with adjustments being made using the six capital cities CPI.

    3 See further in Anon, "Michael Massey Robinson", in The Australian Encyclopaedia (Sydney: Australian Geographic, 1996, pp. 2599-2600).

    4 Adjustment of historical monetary amounts to terms of today’s prices is problematical. Nevertheless we can say that an amount of 4,000 in 1908 is the equivalent of roughly $350,000 today. In 1998-99 prices, government expenditure on the NSW Art Gallery in 1908 was about $0.22 per head of population in the State at that time, compared with an expenditure by the State Government on all art galleries in NSW of around $5 per head in 1998-99.

    5 These amounts are equivalent to about $1.3m, $0.9m and $0.4m respectively in 1998-99 prices.

    6 See further in Helping Literature in Australia: The Work of the Commonwealth Literary Fund 1908-1966 (Canberra: Commonwealth Government Printer, 1967), and Thomas Shapcott, The Literature Board: a Brief History (St. Lucia: University of Queensland Press, 1988), pp. 13-18.

    7 Sir Robert Garran, “Australian CEMA - its origin and purpose”, in Arts Council of Australia (NSW Division), A Five Years’ Record 1943-1947, (Sydney: the Council, 1947), p. 3.

    8 For further on the origins of the State symphony orchestras, see K.S. Inglis, This is the ABC: The Australian Broadcasting Commission 1932-1983 (Melbourne: Melbourne University Press, 1983), especially pp. 157-161.

    9 Holt’s announcement was made in the Commonwealth Parliament on 1 November 1967; see CPD, vol. H. of R. 57 (1967), pp. 2515-7.

    10 For some contemporary international comparisons see Geoffrey Dutton, “The work and prospects for the Australian Council for the Arts”, in Derek Whitelock (ed.), Government Aid to the Arts (University of Adelaide, Department of Adult Education, 1968), pp. 8-20.

    11 In 1998-99 prices this is equivalent to around $90m, or $6.70 per head of population; by contrast the Australia Council’s 1998-99 allocation amounted to about $3.80 per head.

    12 For further details of the establishment of the Council, see H.C. Coombs, Trial Balance (South Melbourne: Macmillan, 1981), ch. 8; Gough Whitlam, The Whitlam Government 1972-1975, (Ringwood: Viking, 1985), ch. 16; and Justin Macdonnell, Arts, Minister? Government Policy and the Arts (Sydney: Currency Press, 1992), chs. 1-3.

    13 For further details of film financing arrangements over this period, see Australian Film Commission, Get the Picture: Essential Data on Australian Film, Television and Video (Sydney: AFC, 1992), and Simon Molloy and Barry Burgan, The Economics of Film and Television in Australia (Sydney: AFC, 1993).

    14 In order to increase the comprehensiveness of the earlier framework, the ABS has developed an updated culture and leisure industry classification. This classification is one of three classifications (the other two covering products and occupations) that will be published, during 2001, in Australian Culture and Leisure Classifications.

    15 The original report on the proposed statistical framework was prepared by a consulting group led by Peter Brokensha; see Corporate Concern, The National Culture-Leisure Statistical Framework (Report prepared for the Cultural Ministers Council Statistical Advisory Group, mimeo, Adelaide, March 1989). The first report on cultural funding based on this framework was for the year 1988-89, and was published as Hans Guldberg, Cultural Funding in Australia: Federal, State and Local Government (Sydney: Australia Council, 1991).

    16 See David Throsby “Government support for the arts and culture: the Australian model” (Paper presented at Cultural Crossroads Conference, Sydney, 24 November 1997). These estimates were derived from data contained in: ABS, Cultural Trends in Australia No. 3: Business Sponsorship of Cultural Activities (June 1996), pp. 27-28; Australia Council, Corporate Support for the Arts 1993 (Sydney: Australia Council, 1993), p. 30; Reark Research, Giving Australia: a Quantitative Exploration of the Philanthropic Sector of the Australian Economy for the 1988-89 Financial Year (Melbourne: Australian Association of Philanthropy, 1991), vol. 1, p. 76; and Daryl Dixon, Study of Assistance to the Cultural Industry through Revenue Forgone (Report for the Department of Arts, Sport, the Environment, Tourism and Territories, Canberra, June 1989). For further details of business sponsorship of cultural activities in Australia, see Australia Council, Corporate Support for the Arts: a Discussion Paper (Sydney: Australia Council, 1986); Yann Campbell Hoare Wheeler, Corporate Support for the Arts 1996 (Sydney: Australia Council, 1996); and Department of Communications, Information Technology and the Arts, Cultural Trends in Australia, No. 8: Business Sponsorship of the Arts and Cultural Activities, 1996-97 (Canberra: DOCITA, 1999).

    17 For some examples of political statements supporting this contention, see further in David Throsby and Glenn Withers, The Economics of the Performing Arts (Melbourne: Edward Arnold, 1979), chs. 10-11.

    18 For discussion of the objectives of arts policy in another time and place, see K. King and M. Blaug, “Does the Arts Council know what it is doing?” in Mark Blaug (ed.) The Economics of the Arts (London: Martin Robertson, 1976), pp. 101-125.

    19 See further on this point in CPD, vol. H. of R. 19 (1976), p. 1822.

    20 Industries Assistance Commission, Assistance to the Performing Arts (Canberra: AGPS, 1976).

    21 See further in CPD, vol. H. of R. 19 (1976) p. 1802.

    22 House of Representatives Standing Committee on Expenditure, Patronage, Power and the Muse: Inquiry into Commonwealth Assistance to the Arts (Canberra: Parliament of the Commonwealth of Australia, 1986).

    23 For a review of the McLeay Report, which draws attention to the Committee’s neglect of the individual artist, see contributions to Philip Parsons (ed.), Shooting the Pianist: the Role of Government in the Arts (Sydney: Currency Press, 1987). For further discussion of arts funding during this period see: Tim Rowse, Arguing the Arts: the Funding of the Arts in Australia (Ringwood: Penguin, 1985); John Gardiner-Garden, Arts Policy in Australia: A History of Commonwealth Involvement in the Arts (Canberra: Department of the Parliamentary Library, Background Paper No. 5, 1994); and Donald Horne, Into the Open (Sydney: Harper Collins, 2000), chs. 12 and 13.

    24 See the useful series of statistical compilations published by the Australia Council under the generic title The Arts: Some Australian Data, of which the first appeared in 1982, with subsequent editions in 1984, 1989, 1991, 1996 and 2001; these reports map trends in key economic variables relating to the arts over time. For an assessment of the economic size of the arts industry, see Hans Guldberg, The Arts Economy: 1968-98 (Sydney: Australia Council, 2000).

    25 See a range of studies cited in National Centre for Culture and Recreation Statistics, Measuring the Impact of Festivals (Adelaide: ABS, 1997).

    26 For some of the contributions to this debate, see papers collected in Ruth Towse (ed.), Cultural Economics: The Arts, the Heritage and the Media Industries (Cheltenham: Edward Elgar, 1997), vol. II, pp. 499-719.

    27 The original study was published by the Australia Council under the title What Price Culture? (1984); for further detail see David Throsby and Glenn Withers, “Measuring the demand for the arts as a public good: theory and empirical results”, in William S. Hendon and James L. Shanahan (eds.), Economics of Cultural Decisions (Cambridge: Abt Books, 1983), pp. 177-191. Our study was subsequently replicated in Canada, with broadly similar results; see William G. Morrison and Edwin G. West, “Subsidies for the performing arts: evidence on voter preference”, Journal of Behavioral Economics, vol. 15 (1986), pp. 57-72.

    28 See Department of Communications and the Arts, Creative Nation: Commonwealth Cultural Policy (Canberra: AGPS, 1994).

    29 The theme of this conference, held in Parliament House, Canberra, on 11-12 August 1994, was built around the questions “What are the cultural industries? How can they make the most of links with other industries such as tourism, new technology, manufacturing? How can they break into the export market?”; see Department of Communications and the Arts, Creating Culture: the New Growth Industries - Conference Papers (Canberra; DOCA, 1994).

    30 See the original survey reported in The Artist in Australia Today, and then the subsequent surveys reported in David Throsby and Devon Mills, When Are You Going to Get a Real Job? (Sydney: Australia Council, 1989), and David Throsby and Beverley Thompson, But What Do You Do for a Living? (Sydney: Australia Council, 1994).

    31 See Major Performing Arts Inquiry, Securing the Future: Final Report, (Canberra: Department of Communications, Information Technology and the Arts, 1999).



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