Why arts and culture should be the policy leader, not the afterthought, in economic crisis recovery

When it comes to arts and culture, the economic analysis of COVID19’s impacts and forecasts has been exceptional: across the past two months we’ve seen leading economists consistently point towards the creative industries as policy drivers for a successful recovery. And while the Commonwealth continues to neglect the industry, states and territories are acting fast.

Economists have painted a grim picture of the arts across this period. On 7 April, ABS data showed that only 47% of arts and recreation services businesses were still trading, identifying it as the worst-hit industry while 90% continued to trade in the majority of other sectors. On 19 April, the Grattan Institute projected a 75% employment downturn. And on 29 April, Deloitte Access Economics assessed a $6.5bn hit over four months to wages and profits.

Whether we’re talking about “arts and recreation services” as the Australian Bureau of Statistics designates it, or Australia’s $111.7bn “cultural and creative activity” as understood by the Bureau of Arts and Communications Research, arts and culture contribute 6.5% of GDP. This is one of Australia’s most employment-intensive industries, with strong industry interdependencies with tourism, accommodation and hospitality. 

So why haven’t we seen a COVID19 recovery policy approach led by the creative industries?

Last month, the Australia Institute presented eight principles for targeting economic recovery most effectively to “create jobs in the short term and lasting benefits in the long term.” The closer an industry aligns with those principles, the more the government recovery effort should focus there – not just for the benefit of that industry, but for the economy as a whole. Starting with GFC-era Treasury Secretary Ken Henry’s compelling advice to “go early, go hard, go households”, the Australia Institute’s principles strongly align with what the arts offers government in terms of valuable policy levers:

1. Go early: The creative industries are a complex ecology compromised predominantly of agile small-to-medium enterprises who are highly responsive to changing circumstances. Known for their innovation, early stimulus would have experienced quite the multiplier, because commissioning and payment can happen relatively quickly compared to less responsive industries. Here’s the billion-dollar stimulus outlined by the industry on March 27; 
2. Go hard: Substantial investment was required at that early stage, and of course, the more time passes, the more that bill grows. Here’s what’s missing and what’s urgently needed; 
3. Go households: Here, Dr Henry was referring to low-income households who spend a much higher proportion of that income on the essentials of life, and so his advice to the then prime minister was to make direct payments to all taxpayers that would be spent immediately. Artists and artsworkers are among Australia’s lowest-paid workers, with professional artists earning only around $18,000 per year from their creative work alone. Similarly, small non-profit arts organisations are the engine room of the creative industries. Stimulus applied here would circulate rapidly across the economy.  
4. Target domestic production: Not only is the arts our most prolific and unique Australian producer, it’s also an export industry. 
5. Target activities with high direct employment intensities: The arts and cultural industries employ 600,000 people including 50,000 professional artists. That’s significantly more than mining, retail, communications, IT and utilities. 
6. Target those most impacted by the crisis: As we've seen above, on any measure the industry is either the worst or among the worst hit. Galleries and venues have been closed by government order, and all self-generated income for 2020 has vanished. 
7. Target useful projects that deliver co-benefits: The Australia Institute identifies a range of such projects for the arts, including commissioning public art, television and stage drama, and funding “artists in isolation”. Co-benefits extend to interdependent industries such as tourism. In a world without international travel, the sooner the arts are back on their feet, the more readily we will travel across regions and states to visit galleries, shows and festivals. 
8. Target regional disadvantage: Many of Australia’s most internationally successful arts companies across the visual and performing arts are based in regional Australia, isolating them from national audiences. The tyranny of distance in Australia further isolates both regional, suburban and urban artists from reaching a national audience, and yet that's what we've all been craving during lockdown: the local and the inspirational. That regional disadvantage has since been exacerbated by the Australian Government’s decision to suspend content quotas for Australian drama, documentaries and children’s programming on free-to-air and subscription TV, further impacting the industry at a time when an increase to quotas was the most sensible approach. With domestic tourism about to become a key economic driver, governments will need to look quickly at how to transform regional disadvantage into an asset.

Clearly, the creative industries align with every one of these principles. Early, responsible and comprehensive investment could have boosted the entire economy, as well as inspired the nation.

Of course, that’s not the only reason to prioritise Australia’s cultural life during a socially debilitating event. ACT Arts Minister Gordon Ramsay recognises the critical role of the arts “to assist the way we come out of COVID-19 as a healthy society”:

“The creative sector is going to be fundamentally important to the way we move through the next stage and then beyond COVID-19. As I say, already people are turning to the arts. The arts refresh us, the arts reflect where we are in life and they help motivate us as well.”

Our states, territories and capital cities are moving fast to ensure that they don’t lose their share of Australia’s creative workforce, audiences and tourists. By this stage, more than two months in, it’s certainly too late for the Australian Government to go early, but it’s not too late to follow these principles responsibly.