NAVA responds to the federal budget

Image: Treasurer Josh Frydenberg delivering the 2021-2022 Budget with Scott Morrison and Ken Wyatt in background at Australian Parliament House, Canberra. Screenshot from ABC News 2021.

The 2021 federal budget handed down on Tuesday night, while neither bold nor adventurous in its vision for the production and articulation of Australia’s cultural identity, must be recognised as the Coalition’s budget most favourable towards artists and the sector in recent years.

Following last year’s omission of the creative industries in Frydenberg’s budget speech, this year the Treasurer finally acknowledged that the arts, alongside other sectors, “continue to do it tough.” Arts Minister Paul Fletcher’s efforts to secure funding for a post-pandemic arts sector recovery opens the door for investment growth beyond Covid-19 to sustain and nurture the sector into the future.

Nevertheless, the blow to the higher education sector constitutes a dangerous precedent for the future of critical research, as well as the sustainability, accessibility and diversity of our educational opportunities. NAVA is concerned about the deep repercussions for art education in particular; most institutions are forced to undertake crippling cost-saving measures, which are disproportionately dealt to art faculties and studios.

Let’s take a look at the potential benefits for the sector, missed opportunities, and what’s needed now to stimulate Australia’s creative output and culture.

In the interests of artists, arts workers and organisations

Tax cuts for low income earners: The rollover of the Low and Middle Tax Offset for another year will deliver up to $1,080 into the hands of taxpayers earning less than $90,000 a year. NAVA welcomes the extension which will have a positive impact for some artists, art workers and creative sole traders, yet concern remains over the lack of investment addressing the shortage of social and affordable housing, nor the adequate support for those forced to rely on JobSeeker, which is now substantially below the poverty line.

Superannuation gains: The Treasurer’s plan to scrap the $450 a month minimum threshold for employees to be paid the superannuation guarantee by their employer is an encouraging move towards a more fair and inclusive superannuation framework. Under the new rules, around 300,000 workers with lower incomes are set to receive additional superannuation guarantee payments. This announcement – though not expected to kick in until July 2022 – is a notable gain for artists and arts workers, who are more likely to work short-term gigs earning small one-off payments, experience low income, and are prone to monthly income fluctuations.

The downside to the measure is the burden on small-to-medium arts organisations to finance the cost, many of whom are already struggling to sustain their operational funding in the wake of the pandemic and years of decline in the Australia Council's discretionary funding. NAVA looks forward to the government’s proposal for the sustainability of small-to-medium organisations through additional government funding. 

Tax support for businesses: The 12 month extension to the two tax incentives – temporary full expensing and temporary loss carry-back – will support organisations that took a hit from the pandemic. When lodging their 2022-23 tax return, eligible companies will be able to offset previously taxed profits from as far back as the 2018-19 income year to receive a tax rebate. Likewise the 12 month extension to asset write-offs for eligible businesses under JobMaker will not only assist arts enterprises, but has the potential to encourage businesses to purchase the work of artists to write-off their taxable income. 

Mental health boost: The pandemic has taken a serious toll on the mental health of many artists and arts workers. The significant $2 billion over the next four years for mental health and suicide prevention services will be welcomed warmly by the sector. Importantly, a lot of mental instability has been recently reported to be a product of COVID-19 restrictions, which left many workers with little or no income. Mental health services must be matched with a targeted income security program for the sector.

Parental support: Subsidies provided for a maximum of 95% of the daily fee for families with more than one child in childcare will enable parents more work flexibility and freedoms.

Modest funding for the visual arts

Announced ahead of the budget hand down, the federal government has given an additional $87.4 million funding over four years to several national institutions including $34.6 million for the National Gallery of Australia and $7.1 million for the Bundanon Trust. 

Also included is an additional $125.6 million to expand the RISE fund to support events and productions. $11.4 million is allocated to support the recovery of regional arts events in 2021-22 with further funding to the Regional Arts Fund, the Festivals Australia program and the Indigenous Visual Arts Industry Support program. A further $10 million is for the music charity Support Act, whose wellbeing helpline became eligible for visual artists in May 2020. As more and more artists engage with digital media, the government’s announcement of a 30 percent refundable Digital Games Tax Offset will be embraced.

Notably the Australia Council received a $4.9 million incremental boost, despite calls from the sector to invest an additional $32 million in the Australia Council’s budget. Without fair and adequate funding, the Australia Council is unable to administer grants to support the core operations of small-to-medium organisations and independent artists.

Former NAVA Board Member, Wesley Enoch, pointed out in The Conversation last week that when “former arts minister George Brandis cut the Australia Council budget by $100 million in 2015 no one could predict the whopping 65 arts companies and 70% of grants to individual artists that would be lost.” At this critical time, we cannot risk yet more shrinkage.

Art education to remain vulnerable

Funding for the higher education sector was reduced by 9.3 percent in real terms for universities and 24.2 percent for vocational education between 2024-2025. The immense pressure on universities, which rely on international students, is only exacerbated by the delay on borders reopening and the slow Covid-19 vaccine rollout.

NAVA fears that universities facing escalating financial pressure will continue brutal cost-cutting and restructuring that leave arts, craft and design faculties disproportionately bearing the brunt. This trajectory will continue to have a debilitating impact on both the number and quality of artists in Australia. We are not simply losing particular expertise, courses and facilities, we are witnessing the erosion of vital sites of experimentation, creativity, critical thinking, collaboration and joy.

On top of the doubling of fees for arts and humanities courses, the Morrison Government’s decision to overlook the higher education sector will only cause further chaos for art education. NAVA strongly encourages the government to throw a lifeline to the invaluable higher education sector.

What’s needed now

If the budget is about values as Peter Martin observes in The Conversation – “the only night of the year in which the government sets out clearly what it stands for and what it plans to do” – then the Treasurer’s acknowledgement that the arts sector is doing it tough must be treated as a helpful starting point.

Moving forward, an arts and cultural policy is urgently needed. Increased funding across the three-tiers of government has the potential to drive domestic tourism and economic growth. The future of Australia’s cultural identity relies on a strategic approach that takes full advantage of the ways in which art and culture meet Australia’s biggest public policy challenges: jobs growth; health; social cohesion; education; and skills.

NAVA urges the government to deliver a credible plan to strengthen the creative pathways for secure jobs and wage growth in the creative industries. As Wesley Enoch implores: “It is time to reinvest in the social capital of ideas. There are jobs in new big ideas. There are economic benefits to leadership and risk taking. There is moral authority in doing the right thing.”