COVID19 stimulus: what's missing and what's urgently needed

There's still a long way to go to ensure that the industry will survive the COVID19 crisis. Measures announced to date don't achieve that. Here's what needs to be done.

Following the Monday 30 March wage subsidy announcement, Minister for the Arts Paul Fletcher issued a media release on Thursday evening stating that JobSeeker would:

  • "keep the spotlights shining in the arts sector" 
  • because "[m]ost organisations in the arts sector are expected to meet the eligibility requirement of revenue having fallen by 30 per cent or more, given that performances have been suspended and venues closed." 

Unfortunately, this is not the case. 

The industry has been united in making it clear that specific, targeted and immediate stimulus is required to prevent industry collapse, and we've outlined what's at stake for the nation. This is because:

  • our overwhelmingly casual workforce won’t be able to access income support measures in their current form
  • our businesses work in unique ways that may not be able to demonstrate the downturn needed to access income support
  • having lost all self-generated income for the year, targeted stimulus is needed – and the more time passes, the more those payments will need to become bailouts rather than industry investment.

Here is a list of ways the packages need to be improved in order to protect the 50,000 practising professional artists, 600,000 workers and thousands of businesses across the creative industry. The list is not exhaustive; we’re adding to it as more and more artists and colleagues contact us or complete our impacts survey. To illustrate, there are also case studies and some direct quotes from our visual arts sector survey.

Priorities for stimulus measures already announced

JobKeeper

  • We welcome the scale of this package and are confident it that can succeed if amended
  • Adjust the requirement that casuals have been with the one employer for 12mo down to 3mo
  • Ensure that government-owned galleries and art institutions are able to access JobKeeper
  • Make payments accessible to Australian artists and artsworkers stranded overseas
  • Ensure that those businesses with irregular cashflows can provide budgets and projections to show that the business has been adversely affected by the impacts of COVID-19. It can be difficult for creative companies to compare income from the same period in previous years, and to show a downturn when their annual operating grants are received in advance, while the bulk of their income – the roughly 70% that's self-generated – will not be received at all.
  • UPDATE: The Treasurer has since acknowledged that a 15% decline is a more appropriate level of loss to be demonstrated by non-profit organisations registered with the ACNC. However, it remains vital that any tied capital or project funding be excluded from their turnover calculations, in order to present a more realistic demonstration of impacts. Such funding cannot be used for employee or operational costs, and the inclusion of these grants misrepresents the organisation's true financial position.
  • UPDATE: The Treasurer has announced that government grants will not be taken into consideration in assessing eligibility for income support.

JobSeeker

  • We welcome the adjustment made to the partner income threshold from $48k to $79k
  • Allow workers to use their taxable income from the prior financial year to demonstrate the diversity of their taxable income in order to prove their eligibility
  • Make payments accessible to Australians stranded overseas
  • Harmonise income averaging arrangements between the ATO and Services Australia: To ensure that artists receiving JobSeeker do not risk jeopardising their income support if they receive funds that are targeted at creative production purposes – especially funds that are being made available specifically for the creation of work during the COVID-19 crisis – Services Australia should adopt an annual averaging process aligned with the ATO Tax Ruling: carrying on business as a professional artist. This will ensure that funds or grants received will not be treated by Services Australia as income that contributes to living expenses. 

Boosting Cash Flow for Employers 

  • Consistent industry feedback indicates that any cash flow benefits of this measure have been negated by the requirement to submit a March activity statement; this payment alone will unfortunately have closed many businesses at this time
  • While the Treasurer has suggested that businesses should pursue their lines of credit with their banks to cover the months of March and April, this is not an arrangement that non-profit arts organisations routinely have in place, and new loans are not likely to be obtained at this time
  • Consider more immediate methods for offering cash flow relief e.g. direct payments via the ATO relief analogous to the Services Australia direct payments to individuals that were made as part of the Australian Governments first stimulus announcements.

Increasing the Instant Asset Write-off

  • Explain how this measure applies to the purchase of artworks: NAVA has requested urgent clarification 
  • UPDATE: Advice has been received and this measure can be applied to artwork purchase
  • Include this information in fact sheets for businesses: ensure that corporations are made aware of the stimulatory effect they can have on the art market by purchasing new works and benefiting from the 50% instant write-down.

Accessibility

  • As a high priority, ensure that all COVID-19 information is released in accessible formats.

Priorities for stimulus urgently needed

As we have seen, measures announced to date do not yet respond to the urgency that has been outlined by the industry, as they do not yet align with the specific needs of our industry.

An industry-specific stimulus package will need to be implemented as soon as possible that redresses our industry’s loss of all self-generated income, without which hibernating companies cannot pay non-staffing expenses and cannot survive. This should include:

 

  • The protection of First Peoples cultural knowledge with targeted support for all impacted First Nations artists and organisations, who employ the most COVID-19-vulnerable people in our country   
  • At least $1bn in immediate cash injection payments to affected businesses who have lost their 2020 self-generated income prospects so that they can ensure business continuity, retain staff, adapt programs including through the use of technologies, and redevelop audiences – ensuring that businesses do not close permanently
  • Deliver immediate cash injection payments to professional practising artists directly and efficiently via professional membership bodies
  • $180m for the Australia Council to boost capacity by supporting organisations who are funded specifically for their industry development work – UPDATE: The opportunity to achieve part of this via the Four Year Organisations program has been lost
  • Rent relief and security for lease holders in both government-owned and private tenancies
  • Enhanced tax incentives to motivate private giving and investment in artworks and industry development 
  • Permanently remove the Efficiency Dividend on Australia’s National Cultural Institutions and public broadcasters, which is punitively compounding the damage to national and state cultural organisations
  • Increase the acquisitions budgets of our key national institutions including the National Gallery of Australia, the Museum of Australian Democracy, the Australian Museum, and in particular Artbank, ensuring that the Australian Government can take a visionary role in enhancing our national collections, stimulating the art market and protecting artists’ livelihoods
  • Restore artwork investment for self-managed super by adding an “exhibition” provision to SMSF legislation so that investment artworks can be seen, kickstarting the commercial market and propelling artists’ livelihoods
  • Contribute $30m towards the Regional Arts Fund to ensure long-term recovery that inspires regional culture and drives regional livelihoods – remaining mindful that too much of regional Australia is experiencing COVID19 as a crisis following a crisis, without any time to recover cultural life
  • Contribute ambitiously to the Artists’ Benevolent Fund and SupportAct to protect artists' livelihoods and urgently redress the mental health crisis, noting that tragedies have already occurred.

 

These are all immediate measures to see the industry through the coming months, so that self-directed activity can prevent industry collapse. To ensure the future of Australia’s cultural life:

  • On industry advice, create well-designed long-term stimulus measures to avoid industry collapse and inspire innovation – including an impactful public campaign to rebuild confidence. This is all the more important as we move towards re-emergence.

Case studies

Hala is an internationally renowned artist with an exhibition and installation practice who has won numerous awards across her career. She earns $46,000 per year across five casual jobs presenting workshops at galleries, teaching at a university, and working in hospitality. After 15 years as a casual she has only $33,000 in super, and is not willing to jeopardise her future by drawing on that. Her primary employment relationship is with one of the galleries – that's where she claims the tax-free threshold – but unfortunately, the gallery is unable to demonstrate the 15% downturn required for non-profit organisations, because its income is inconsistent across the year.

> Hala cannot access the six-month living wage via her primary employer, and none of her employers can retain her expertise if she tries to access JobSeeker instead, for which it will be difficult to demonstrate her ongoing eligibility. 

 

Dun is a sole trader artist who, later this year, was going to have the career-highlight experience of being curated into an art fair as a featured artist – but now, that’s been cancelled. The fee was the equivalent of two years’ income, and they would’ve sold a great deal of work, so they hadn’t secured many other paid opportunities for 2020.

>  Dun wasn’t yet contracted, can’t demonstrate a downturn, and can’t access any income support

 

Regionalplace Gallery is a typical public gallery and the lifeblood of local community life. Like the majority of Australia’s regional galleries, it is owned by local government. The gallery’s rare collection is of national significance and contributes significantly to the Shire of Regionalplace’s balance sheet. The gallery receives no shire operating budget and is instead expected to return revenue to council. All of the gallery’s self-generated income has disappeared including workshops, community events and venue hire.

>  As a government-owned entity, Regionalplace Gallery is unable to claim stimulus payments.

 

Cityspace is a capital city contemporary gallery with global impacts. Over 50% of its staff are casually employed artists and artsworkers, including installers, technicians and curators. One of their artists is currently stranded overseas as part of a residency exchange, and in unable to return home and unable to access any income support payments. Cityspace’s closure has eliminated all of its self-generated income and jeopardised its commercial and philanthropic relationships, but the gallery can’t demonstrate the required downturn in order to access support. Worse, having investigated JobKeeper, Cityspace can’t commit any of its remaining staff to carrying out the admin required to process a large number of small payments, and can't pay the $1500 fortnightly payment for the month or more needed until the reimbursement can be processed. Even if it were possible to prove their eligibility, these payments would only support staff and not the gallery, which has small reserves and will be unable to pay its outgoings as of May.

>  This means that nobody associated with Cityspace will be able to access income support, and neither will Cityspace. After 35 impactful years, they’re currently considering winding up.

 

Arts Association is an industry body whose members are organisations all over Australia. One by one, they are withdrawing their membership because they can no longer afford to pay. Membership is the association’s primary source of income and they don’t receive any grants. Soon they will have no members left. With the recession expected to last across 2020-2021, this industry sector won’t have an expert body to lead national capacity-building work for the COVID-19 recovery period nor beyond. 

> Arts Association can’t access support because they’re experiencing a slow burn, not a downturn.

Impacts: direct quotes from our COVID-19 survey

“We have had to cancel eight (and counting...) of our upcoming events and exhibitions due to the risks that COVID could have on our Central Australian community. This has meant artists have had to change their plans – which drastically affects their working year which, in turn, affects their financial position.”

 

“We probably won't be able to hold this program again because it was so contingent on a range of types of funding from grants that we will not receive again. It took us years to secure those grants.”

 

“This was the first of all my future jobs cancelled. I now have no work lined up. I am a single mum with a mortgage and I am quite frankly stuck without any money and no chance of work anytime soon.”

 

“These closures have removed two of my casual jobs and I now have no income from two key sources. I live week to week generally and now I am in a very challenging position. This situation is also likely to effect an upcoming group exhibition and also the Spring 1883 art fair in which I was scheduled to show work. I am now in a position where I cannot afford to spend money producing artwork even if the art fair does go ahead. These are very grim times and I feel very scared.”

 

“This will impact market development for future European and Asian tours and installations of my current work. Loss of current income means future sustainability is in question.”

 

“Some of the cancelled project components were part of strategic planning as pilots for future programs. We have lost R+D time, income, capacity building and if more cancellations continue (which is likely), we will be unable to produce any public events in the future.”

 

“Having just survived financial hardship due to bushfire impact in my local area this is just another nail in the coffin.

 

“This was my main exhibition this year. It took 1 year to prepare. What was previously a big opportunity to propel my career in visual arts has basically been nullified.”

 

“I have been working on this project for nearly a year. Psychologically it is really devastating to have such a large project rescheduled and potentially cancelled. There was an immense build up I have been working really hard and now I am not really sure what to do. Makes the days empty. I also have 11 artists that I am collaborating with and paying working on it. I will still honour these payments out of my own pocket.

It’s ghostlights, not spotlights, for the industry hardest hit by COVID19

Image: Dean Cross, I LOVE YOU, I'M SORRY, 2020. Installation view, Firstdraft. Photo by Zan Wimberley