You’ve got $7 billion – so how will you fund the arts?
In this crossposting from The Conversation, Jason Potts from RMIT University, argues public arts funding should create unintended consequences.
Arts and cultural funding could be improved if we could just agree on a level of funding – and then use economic analysis to design the models of funding delivery. In short, give the tax system a bigger role – and the expert panels a smaller one. Make differences at the margins by funding skewed toward outputs and the demand side.
Last year the Australian Bureau of Statistics did the maths – government spends about A$7 billion annually in Australia on arts and culture. The exact dollar figure varies depending on what we count, but it includes heritage, broadcasting and botanical gardens, along with all the usual suspects: performing arts, literature, film, visual arts, and so on.
Love it.
More articles like this please.
The way we fund the arts is fucked and needs a good kicking… so ideas for how we might do that are desperately needed.
The tax system was given a bigger role in the film and TV industry by the introduction of the 10BA tax incentives. They were steadily rorted by a mass of producers, lawyers and bankers and whittled down until ineffective and there were many examples of films falling over and crews left unpaid.
Direct funding through the establishment of the Film Finance Corporation stabilised the system, flushed out the rorters and its model was “market driven”. It was a very efficient way to distribute subsidy.
The new Producer Offset system which replaced it is a form of indirect funding based on a tax rebate. It is incredibly inefficient. Producers other than large multinationals with umbrella corporate lending are forced to borrow against the tax rebate from third party lenders to cashflow production.
Audit, legal, accountancy, loan establishment fees, high interest and company formation for special purpose production vehicles amount to over 20% plus of the loan amount. This is dead money never on the screen.
After much gnashing of teeth the conclusion seems to be that direct funding of the specialist film and TV drama and documentary business by government is easily the most efficient way to fund.
The caveat is that these organisations needs to work with a level of clarity, transparency and accountability and that industry bodies need to keep them on their toes.
In a small market with demonstrable market failure for Australian product no system will be perfect and there will always be people very disgruntled with the system. Further little mention is made of arts training. The situation where the Australian Film & TV School now has no courses over one year in duration, in direct contrast to the three years degrees of the most outstanding schools in the US and Europe should surely be a cause for concern but there hasn’t been a peep out of the industry.
Harry I love your bland assertions that the Film Finance Corporation stabilized the system, because its model was “market driven”. and that It was a very efficient way to distribute subsidy. Another economic rationalist trying to run the arts.
It was and still is totally flawed Harry.
It stabilized the system so much it became moribund. You think by saying it was market driven that that automatically made it efficient? Have a look at its balance sheet Harry it’s pathetic. And so is the balance Sheet of Screen Australia. They both traded while insolvent under their unsound financing model. All this neoliberal market failure hocus pocus will not solve the problem. But good luck Jason and Harry.
Mike. There is no film industry outside the US and India which is self sustaining and even states in the US are offering incentives. If you want local films to be made you need subsidy and then the issue becomes how finite the money and how to achieve measurable results. If nobody wants to pay to see your money then that it is a pretty measurable result and has nothing to do with economic rationalism.
Harry you miss the point. When examined you will discover the current film financing model is a restraint of trade, creativity and culture. The model makes no money for anyone (except Baz Luhrmann), homogenises creativity and promotes cultural cringe. Why? Because the cornerstone and prerequisite of financing is a pre sale to a single bidder (distributor) who calls the commercial. creative and cultural tune. Enough with your platitudes Harry. Do your homework on why the model doesn’t work, and why they have to subsidise television networks and production companies just to keep going.
Excellent article.
The issue of funding for Australian arts and creativity is at the very core of why we are currently founding the Australian Arts Party.
Jason, you’ve touched on an amazing number of ideas we’ve been workshopping on this very subject. Inspiring stuff!
A fine article and one full of inspiration.
The arts must be supported, and funding is the most important way to do it, however arts education is vital, and should be reviewed and guided from time to time, as should arts spending by those who receive the subsidies.
The A.B.C is and should be subsidised and scrutinised, but funds allocated to film makers should be very closely scrutinised and subject to penalty systems and even repayment systems.
In any advanced and civilised society, it is vital to support the arts, but art baggers and charlatans are everywhere in such societies, and must be either prevented or routed out and made to pay for their crimes.
Great article and good to see reflection on topics beyond media and marketing.