Tearing up funding agreements is sovereign risk

The community sector is especially vulnerable to funding cuts. But why is there so little noise about it?
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We always knew there’d be some nasty surprises in the detail of the Australia Council restructure.

Now some of those shocks are emerging.

The revelation that as many as 14 community arts and community cultural development organisations will not have their six-year funding agreements honoured by the Australia Council is alarming. 

In any other industry but the arts, such an announcement would be major news. Industry leaders would slam the decision, pointing to the obvious effects on industry confidence and the clear threat it represents of ‘sovereign risk’.

But the arts and culture are not like other industries. Artists and arts organisations are expected to be grateful for any funding dollars they receive. Complaining or making a fuss is seen as ingratitude.

Like any investors, cultural investors need certainty if they are to commit to new programs and carry out their plans. Knocking over the sandcastles and forcing everyone to start again is scarcely calculated to install confidence in a sector that is already experiencing multi-million-dollar funding cuts.

The decision to force the community organisations to reapply for their funding is all the more bemusing because it is so inconsistent.

The whole thrust of the Australia Council’s rhetoric since announcing the restructure has been about simplifying application processes, and ensuring more stability for arts organisations once they achieve funding.

This decision makes a mockery of such rhetoric. It forces organisations to undergo another lengthy and expensive application process. It also introduces significant new uncertainty to the entire community sector.

The very notion of supporting organisations that work culturally and artistically in the community appears to be under siege. Ever since the ill-fated decision to abolish the Community Cultural Development Board way back in 2004, the sector has lacked a cogent defender within the Australia Council’s hierarchy.

To see why the community sector is so vulnerable, you only have to imagine the uproar if a decision like this had been taken about the major performing arts organisations. Unlike the community partnerships organisations, the majors have been explicitly quarantined from any restructure. 

ArtsHub sat in on a consultation with the Australia Council’s Lyn Wallis in Melbourne on Tuesday. In it, she said pointedly that the major performing arts sector was off limits to any funding cuts, for political reasons.

This is not the last shock likely to befall the sector. On Wednesday, we learned that the forthcoming six-year round of organisational funding will be the last round until 2021.

Rather than stagger the funding across a number of years, as would seem sensible and less disruptive, the Australia Council is preparing a big bang restructure in which the lucky winners will have their funding assured past two federal elections. The unlucky losers won’t have another chance this decade.

The justification for such change is funding certainty. But if certainty is the goal, why is the Australia Council tearing up existing six-year agreements?

The inevitable result of this decision is that some organisations that miss out will go to the wall. That was what happened at a state level in Queensland, when similar budget cuts were imposed on the small-to-medium sector, while the majors were protected.

The arts sector has been treated shabbily so far by the Australia Council through this restructure process. While some of the changes are undoubtedly positive, the piecemeal way they have been announced has done no-one any favours.

Ultimately, the problem for the smaller orgs is political. The arts has no strong lobbying voice, no peak body, and little infrastructure to mount a grassroots campaign. The situation is most acute at the smaller end, where, despite years of complaining, the small-to-medium sector and independent artists still lack a properly resourced peak body or lobby group.

As long as the sector remains politically disorganised, the superior social connections enjoyed by the elite board members representing the major companies will ensure they win distributional arguments, each and every time. 

Ben Eltham
About the Author
Ben Eltham is ArtsHub's industry columnist.