Another round of broken arts when funding is critical

The coronavirus crisis has hit just as the Australia Council is preparing to release its decision on four-year funding.

Performers in Big hArt’s production Skate. Picture: Jane Dempster.

The small to medium arts sector has withstood some harsh headwinds in recent years. Budget cuts to the Australia Council, leading to the “Black Friday” grants round of May 2016, has left fewer companies with medium-term funding support and a residual sense of precariousness in the sector as a whole. That situation is not going to improve when the next round of grants for four-year funded ­organisations (FYFOs) is announced within the fortnight.

The new and terribly unpredictable threat to the sector is the coronavirus and the lockdown of theatres, concert halls and galleries across the country. Major companies, including Opera Australia and the Australian Ballet, have abandoned their current seasons. Live Performance Australia, representing companies large and small, estimates a financial hit to the industry of $180m if venues close for a month, and $540m in the event of a three-month ban.

The impact on the small to ­medium sector from enforced or self-imposed closures is difficult to determine. In one estimate, the 124 companies in the FYFO group could lose $2.6m combined for every month they are essentially closed for business (based on median earned income of $250,000 a year, excluding grants).

Small companies may, on the other hand, find they are able to operate if they produce work in small venues of fewer than 500 seats. Indeed, some venues are planning to stay open, for now, given the not unreasonable assumption that people will want to be entertained in these otherwise darkened days.

Performers in Big hArt’s production Skate. Picture: Jane Dempster.

Companies will learn in coming weeks whether they have been successful in the Australia Council’s next round of grants for FYFOs, guaranteeing their base funding for 2021-24. The Australia Council has not disclosed the size of the funding pool but, assuming there has been no change, the FYFO program is likely to have $28m available.

What’s different is the size of individual grants being offered: the minimum has been raised to $100,000 (from $75,000) and the maximum to $500,000 (from $300,000). The grants were increased, the Australia Council says, because $300,000 a year was insufficient for some organisations to thrive.

Theatre Network Australia’s Nicole Beyer has crunched the numbers on this new scenario. In her analysis, the increase in the value of individual grants (and a modest allowance for inflation) will put a $7m squeeze on the FYFO program, forcing out about 30 companies from multi-year funding. The cohort will shrink to fewer than 100 companies, compared with 124 currently, and 145 before Black Friday. The outcome follows a round of preliminary applications when 412 companies put in expressions of interest for the FYFO program. Only 162 were invited to apply in full.

Black Friday and its unhappy sequel are directly related to Coalition policy regarding the Australia Council. In its 2014 austerity budget, the government cut $87.1m across four years from the arts agency; the next year brought forth George Brandis’s National Program for Excellence in the Arts, later renamed Catalyst, that chopped another $105m. The remainder of Catalyst funding has been returned but the federal allocation to the Australia Council, at $212m this year, is still less than the brief high of $220m reached under Labor in 2013.

The small-medium sector has shown itself to be remarkably resilient under the circumstances. The predicted closures from “defunding” after Black Friday were limited to only a few cases. Melbourne’s Kage Physical Theatre closed shop in 2018, citing changing market and funding conditions. The movable feast of indigenous music, the Black Arm Band, shuttered in 2017 amid questions over its financial reporting and governance.

Other organisations have merged — the Contemporary Art Centre of South Australia and the Australian Experimental Art Foundation, both in Adelaide, have joined forces to become ACE Open — or regrouped on a smaller scale, such as national dance ­industry association Ausdance.

Elsewhere, small-medium companies appear to be growing, thriving even, without the benefit of being FYFOs. Sydney physical theatre company Legs on the Wall, progressive youth arts outfit Big hArt, Brisbane ensemble Topology and the National Association for the Visual Arts — all of them defunded in 2016 — have grown their businesses on the strength of their artistic programs by seeking new markets or by ­diversifying their revenue base.

Adelaide’s Brink Productions — which has enjoyed international success with Memorial, an intensely moving theatrical meditation on loss, inspired by the Iliad — was among the casualties in 2016. Since then it has attracted special funding for projects such as Memorial and has organisational support from the South Australian government, helping lift its turnover to $1.9m in 2018.

Brink’s artistic director, Chris Drummond, says appearances can be deceiving, however, and warns of impending damage to the small-medium sector. The cumulative effect of budget cuts and a shrinking base of support for companies makes for an increasingly tough operating environment that some may not survive.

While Brink has state government funding locked in for two years, it failed at the EOI stage in its application for $300,000 a year from the Australia Council. “After Brandis, there was a lot of support for companies like us and Slingsby,” Drummond says, referring to another Adelaide theatre company. “What’s happening now is that people can’t respond in the same way again.”

Scott Rankin, of Big hArt, says his company continues to deliver its programs to far-flung disadvantaged youth without federal operational funding. Last year, the company presented its skateboard show, Skate, a production Rankin wants to develop for commercial markets internationally. Grants from the Australia Council and the commonwealth were less than $150,000, while corporate backers including the Barangaroo Delivery Authority — where Skate was presented — contributed more than $1.9m.

Big hArt applied for $500,000 from the FYFO grant round but fell at the first hurdle. Its proposal lacked sufficient evidence and justification for funding at the maximum level for four years, the company was told. It means that by 2024, when Big hArt has the opportunity to apply again, it and other highly regarded companies will have been without organisational support from the Australia Council for at least eight years.

Multi-year or organisational funding is critical to arts companies because it provides medium-term security, allows them to continue to pay salaries, and gives them capacity to seek income from other sources. It removes the provisionality of relying on project grants, donations or corporate dollars tied to a specific purpose.

Whether base funding of up to $500,000 is sufficient to safeguard companies in the event of a crisis such as COVID-19 is difficult to predict. Many companies rely substantially on their earned income from box office, donations and other support, as well as on government grants. A lengthy disruption to their business and no opportunity to recover costs could be disastrous.

Arts Minister Paul Fletcher has convened a crisis meeting of arts sector leaders on Tuesday, where potential government assistance will be discussed.

TNA’s Nicole Beyer, having surveyed the landscape of small to medium companies, says a fiscal stimulus for the sector would produce benefits greater than the funds invested. An injection of $7m, minimum, would maintain the current cohort of FYFOs. Ramp up to $16m or more, and the Australia Council could fund all 162 companies that were successful at the EOI stage, creating the equivalent of 200 new jobs.

In the absence of additional investment, Beyer warns, defunding 30 companies will potentially lead to 160 job losses, about 250,000 fewer paid attendances, and 7.5 million unpaid attendances at shows and exhibitions people won’t be able to see. That’s not counting the impact of COVID-19. “Organisations may not immediately close down, but they will start shedding staff and shrinking programs,” she says. “I feel sad — why are we losing this incredible infrastructure?”

The small-medium arts sector is adaptable, resilient and — above all — creative. As companies enter a strange and uncertain period, their strength and resolve are about to be tested yet again.