Visual artists lead the call for tax reform

The NSW Government has released its summary of submissions to the Art of Tax Reform consultation, and of the 307 submissions received, more than one in three (35%) came from the visual arts. That’s a clear message: the current tax system isn’t working for artists, and reform is long overdue.

The National Association for the Visual Arts (NAVA) welcomes the consultation summary as a significant opportunity to modernise tax settings so they reflect the realities of artistic work.

“This is the most momentum we’ve seen on tax reform for the arts in decades,” said Penelope Benton, Executive Director of NAVA.

“Artists are sole traders, small business operators, cultural workers and innovators - yet the current tax system penalises them at almost every turn. We’ve been advocating for these changes for years. Now they’re finally on the table.”

NAVA’s submission to the consultation, grounded in over two decades of policy research and the organisation’s 2025 Tax Survey, outlined practical reforms across income tax, GST, grants and prizes, workspace affordability, and superannuation. Many of these ideas are now reflected in the government’s summary report, including:

• Removing income tax from art prizes, fellowships and government grants which 44% of submissions supported
• Exempting professional artists from Non-Commercial Loss (NCL) rules, which block expense deductions for those earning over $40,000 in other work
• Introducing averaging for GST thresholds to address harmful spikes triggered by one-off awards or commissions
• Exploring levies on AI developers to remunerate artists whose content is used to train generative AI models
• Broadening deductible expenses, including home studios, childcare, and travel to Country and engagement with Elders for First Nations artists.

“Current tax settings contribute directly to the precarity of artists, pushing many into poverty and making long-term careers financially unsustainable,” said Benton.

“Tax settings should enable creative practice, not penalise it. If enacted, these reforms would reduce financial pressure, improve income security, and help artists build sustainable careers.”

“Taxing art prizes like regular income ignores the reality of how artists work. One-off prizes can distort annual income, triggering GST registration, HELP debt, and significant tax bills that outweigh the prize itself. Instead of helping artists thrive, the current system can leave them worse off.

Findings from NAVA’s 2025 Tax Survey reveal the toll of the current system:

• Over 55% of artists who received a prize or grant in the last five years said tax obligations significantly reduced its impact
• Some artists lost up to 50% of their award value to tax and GST - one reported losing $20,000 off a major prize, another $9,000 in tax and $3,000 in GST on a single grant
• 72% expect to be affected by NCL restrictions in the next five years
• Many described avoiding grants or returning funds due to tax and Centrelink complications

“Artists aren’t asking for special treatment, they’re asking for reasonable and realistic tax settings that reflect the nature of their work,” said Benton.

“This consultation shows there is both political will and sector-wide consensus. We’re optimistic that meaningful, lasting reform is within reach.”

NAVA staff will attend the Art of Tax Reform Summit this week and continue working closely with policymakers and the sector to progress reforms. Benton noted that many of the proposals now under consideration have been seeded through years of advocacy including NAVA’s Visual Arts Industry Guidelines Research Project (VAIGRP) (2001), Big Picture report (2005), and the Myer Inquiry into the Contemporary Visual Arts and Craft Sector (2002).

“It’s taken time to get here, but the conversation has shifted. Artists have shown up, spoken out, and offered real solutions. This is what policy change looks like, and it gives me enormous hope for what’s next.”