The Non-Commercial Losses rules were
introduced to catch the so-called 'Pitt Street Farmers' who ran elaborate
farming businesses at a loss, and claimed the losses against their substantial main
business income. When first introduced, the farmers lobbied the Government to introduce
a limited exception.
Through effective advocacy, NAVA managed to
have this same exception applied to artists. Accordingly, the rules do not
generally apply if the income from other (ie. non-arts) sources is less than
$40,000 in a particular year. However, the cap on this non-arts income does
discriminate against a proportion of artists who should be entitled to make
their legitimate art business expense claims.