NSW Budget: Record funding as NSW Art Gallery struggles

A slump in ticket sales and high staff costs have forced the NSW Art Gallery to seek millions in additional funding from the Minns government.

The Art Gallery Of NSW is suffering from falling ticket revenues and soaring staff costs. Picture: Mark Kolbe/Getty Images

State budget: Falling ticket revenue and soaring staff costs have forced the NSW Art Gallery to go cap in hand to the Minns government for millions.

However, its pleas for a rumoured $15 million or more extra to prop it up have been rejected, with a more modest $8.8 million of additional funding to be set aside in the upcoming NSW budget.

Despite receiving less than it had sought, the additional funds will push the total taxpayer-funded contribution to the gallery to record levels of a little over $110 million.

The plea for a cash top-up came amid a downturn in visitor revenue, which declined despite the gallery doubling its floorspace through the recent opening of Sydney Modern.

In its 2017 business case for the new gallery, it had projected almost $21 million in ticket and membership revenue. However, the reality has been closer to $13 million.

A NSW Treasury financial governance and performance review undertaken of the gallery in March found it had been plagued by increased costs.

The Art Gallery of NSW, including Sydney Modern, has been plagued by increased costs.

Higher salaries and wages from the hiring of more staff than had been assumed in the original business case for the Sydney Modern had contributed to the increase.

The review also found that higher non-discretionary operating costs for insurance, security, utilities and building maintenance than the original business case estimated had added to the financial burden.

Lower margins being ­realised from retail, venue hire and food and beverage ­operations within the gallery had also hurt the bottom line, it found.

It also noted the “inaccurate” forecast of its self-generated revenue and its sponsorship funding over the forward ­estimates, while noting how its building space might be “under-utilised” and able to generate more commercial revenue.

Prior to Sydney Modern, the gallery had an average expense base of $64 million – a figure which has now risen to $99 million.

In the last budget, the gallery had budgeted for more than $20 million to be generated in ticketing and membership ­revenue.

As of February this year, it was forecasting just $12.9 million in ticketing revenue.

Arts Minister John Graham said the increased budget allocation of $8.8 million was “an appropriate level” to meet its core costs, “including paying staff and ensuring the gallery remains free to enter for families and individuals and continues to be a free place of learning for our schoolchildren across NSW.”

The increase means the total approved expenditure for the gallery will have risen by 83 per cent, from $58.8m in 2017-18 to “well over” more than $100m, he said.

“This is record funding for the Art Gallery of NSW, an institution that plays an important role in our community and cultural life,” he said.

“Despite doubling its floorspace through the opening of Sydney Modern, the review of its operation shows, ticketed visitors are down,” he said.

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