Fears Arts Centre may have to sell assets and sack 30 per cent of its workforce
The Arts Centre is preparing for deep cuts to jobs and programs, including mothballing Kylie’s gold hot pants.
Confidential
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The Arts Centre Melbourne is in dire financial strife and may be forced to cut programs, slash jobs or close unless it gets an extra $223m from the taxpayer, leaked documents show.
Internal Arts Centre documents obtained by the Herald Sun show that one scenario being considered includes selling major assets and sacking 30 per cent of the workforce — about 74 people — as well as shutting the popular Australian Music Vault, and “mothballing” exhibits that include Kylie Minogue’s stage underwear.
The scenario also includes removing financial support for the Australian Ballet, Melbourne Symphony Orchestra, Melbourne Theatre Company and Opera Australia.
This option, which would see the centre transformed into a solely for-profit enterprise, would result in a “major cost reduction” and increase revenue but would be “insufficient to remain solvent”, the documents warn.
The documents, briefings for an executive team meeting last month, state that under this scenario the Arts Centre would either have to receive ongoing funding from the government to keep it afloat or else “simply cease trading due to not being a going concern”.
It would also result in the Arts Centre breaking the law by not being able to fulfil its legislated purpose and throw into doubt the financial viability of the ballet, orchestra, the MTC and OA.
Other implications would be “poor customer service” and “reputational risk across all stakeholder groups,” the documents state.
The documents state that if no action is taken the Arts Centre may need $70m in solvency funding over the next four years and that “without substantial investment in initiatives or damaging cuts, over a 10 year period solvency support may even amount to $223m”.
Executives were also given other less-damaging scenarios that still involve making cuts to jobs and programs, as well as receiving tens of millions of dollars in extra government funding.
It comes after the Andrews Government gave the Arts Centre an extra $26.5m in Covid funding last year, on top of $36m the year before.
In each scenario laid out in the leaked documents, the Australian Music Vault is to be closed after government funding for it runs out.
The documents blame the centre’s woeful financial position on increased wages bills due to agreements struck in 2018 and 2022 and also claim spending on maintenance is running at between $8.5m and $9.5m a year.
It also said the pandemic “derailed the trajectory of trading revenues” and the centre needed “material investment” to recover the lost growth”.
The Australian Music Vault was launched by its founding patrons Kylie Minogue, Tina Arena, Michael Gudinski and Molly Meldrum in December 2017.
The vault was established as a space to celebrate Australian contemporary music.
Meldrum said it was “about time” Melbourne had a rock and roll hall of fame equivalent, and described the venue as a “dream come true.”
Minogue has built up a long relationship with the Arts Centre. Its Performing Arts Museum houses many of her most famous outfits, including Charlene’s overalls from Neighbours and the gold hot pants from the Spinning Around music video.
“I’m really excited to be a part of the Australian Music Vault because people can celebrate the history of our music industry,” Minogue said at the launch. “It’s brilliant the government has got behind it and supported it.”
Gudinski, the late Mushroom Group boss, who passed away two years ago, said at the 2017 event: “Australian music has been such a part of my life … there’s more to be done.”
Arena said the music vault was a “fantastic initiative,” but “very overdue.” She added: “It is absolutely imperative to support the arts.”
The music vault features items from Daryl Braithwaite, Archie Roach, Nick Cave, INXS, Men At Work, Split Enz, Peter Allen, Johnny O’Keefe, Paul Kelly, Chrissy Amphlett, Midnight Oil, Missy Higgins, The Seekers and Skyhooks.
The Arts Centre’s woes also come as it prepares to do guided tours, from June of its Australian Performing Arts Collection, which includes 1000 items from Minogue’s pop career.
The collection consists of 780,000 pieces, which have been accumulated since 1975.
The items include a pair of knickers worn by Minogue on her Fever tour, Dame Edna Everage’s glasses and the original Hey Hey It’s Saturday Ossie Ostrich puppet.
The position in the leaked papers about the Arts Centre’s problems contrasts with the public statements made by the centre and its management in last year’s annual report.
In the annual report, the centre hailed the success of the new agreement, saying it was “particularly pleased” to offer better conditions to workers.
And acting chief executive Leanne Lawrence also said the Sidney Myer Music Bowl “led the charge” to recovery while the centre’s indoor venues has “slowly but surely” returned to high utilisation levels.
However, the centre noted it was financially dependent on ongoing government support.
An Arts Centre Melbourne spokesperson said: “The Victorian Government has provided Arts Centre Melbourne and our public cultural institutions with unwavering support throughout the pandemic.
“We are grateful that this financial support has allowed us to provide Victorians with the opportunity to engage with the performing arts over the last 3 years.”
A Victorian Government spokesperson said: “We invest heavily in our arts and creative institutions right across the state because we know how important they are to the community and the economy.”
Dan: Let’s not get ahead of ourselves
Victorian premier Daniel Andrews has insisted that the Arts Centre’s financial situation isn’t as dire as a leaked internal document suggests but warned the upcoming budget will be “challenging”.
The Premier on Tuesday said the arts and creative sector had been “supported very strongly” by the government.
“They always will be,” he said.
“Some of the concerns in the art sector, I don’t think they’re well founded.
“I think we’re getting a bit ahead of ourselves.”
Mr Andrews said he wasn’t familiar with the internal documents which warned the Arts Centre could be forced to cut programs, slash jobs or close unless it gets an extra $223m in government funding.
“Let’s be clear, the Arts Centre don’t determine their own budget. The only document that matters are the budget papers that will be handed down by the Treasurer in May. They haven’t even been written,” he said.
“There’s not a funded agency or organisation in our state that doesn’t want more money every May, every year. That’s what happens, that’s what budgets are about.”
The Premier added that the state was focused on its plan to “rebalance our budget” and “end this period where we’re running the state on borrowed money”.
“This Budget that’s about to be delivered — it’s not the Budget of five years ago. We had, for the best of reasons, to go and borrow money,” he said.
“This is going to be a challenging budget. We used the state budget to protect the household budget.
“Now that money has to be paid back. More importantly, we have to stop the borrowing.”
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