More money for the big companies: governments back Nugent

The big news in the Federal arts budget is the Government’s increase in funding to the 31 major organisations investigated by the "Nugent Inquiry". The Government announced an increase in Federal funding to the companies of $43.3M over the next four years, and let it be known that this is $10M more than had been recommended by Nugent. It imposed a condition: the State governments must throw in their share, $25.2 million.

Minister Alston’s office announced the specific contributions from each government. Music Forum is informed that these were based on the recommendations by Nugent: formulae for determining the funding needs for each of a number of categories of company, along with consideration of its geographical and other context; and formulae for the share of funding responsibility to be accepted by the states and commonwealth based on company classifications as ‘global’, ‘flagship’, ‘niche’ and ‘regional’.

Terry O’Connor, spokesperson for the Minister, told Music Forum that the stipulated amounts have already been agreed by the Governments. While the additional funding to/from each state has been published, the subsidy to each company is not yet public:

You will note that the commonwealth contribution is greater than that announced by the Minister. O’Connor tells us that the additional $1.7M actually has been drawn from the Department of the Arts’ administrative budget!!! That’s a blow to cynicism.

The increase in federal funding (to $43.3M) is comprised of $31.2M for continuing subsidies and $12.1M for a one-off industry adjustment package. Allocations from the $43.3M over the four years are $9.1M, $11.7M, $12.3M, and $10.2M.

Music Forum readers may recall from the accounts of the Nugent recommendations in previous issues that the Commonwealth share of funding was to be highest for ‘global’ companies, diminishing for 'flagship', ‘niche’ and ‘regional’ companies. This explains the somewhat high share to NSW (43% cf. state population share of 36%), host to a number of global and flagship companies. However, the ratio of the total commonwealth subsidy to state subsidy is highest for Victoria, at about $3.60 to every Victorian dollar. The smaller states do not do nearly as well: the ratios are about a third of that. Nevertheless, we are told that the arts communities in all states receive more commonwealth funds than previously.

The additional contributions by the states depend upon their relative present contributions. For instance, Queensland government subsidies to its companies are already higher, relatively, than those of most other states, and so it needs to put up only a tiny $1.36M over four years in additional funds. NSW is contributing 42% of the total state funding, and given the benefits, so it should. Tasmania doesn’t receive much additional federal funding and has to contribute most of the additional funding itself. But given the per-capita benefit of existing federal funding to the Tasmanian Symphony, perhaps that’s fair enough.

Where is the money coming from?

The Minister claims that these are new funds, and that the increased subsidies have not been made at the expense of any other arts clients. In the department’s cultural budget there are a number of cuts, a number of increases, adding to a small total decrease. It would be of course speculative to line up the increase for Nugent against other specific cuts. Indeed, given that one large cut could be from capital funding, the claim of new operational funding seems credible.

The Cultural Development Assistance Program, which takes in organisations such as Opera Australia, the two opera/ballet orchestras, Youth Music Australia, NIDA gets $2.6M less (-3%). The budget provides no detail, but presumably the cuts will not be against the ‘Nugent’ organisations; they may or may not be the result of moving some expenditure or other to another category. We await further information.

As noted, the commonwealth claims that it is giving $10M more than recommended by Nugent. However, its funding covers four years rather than Nugent’s three, and an average of $8M a year is going to continuing subsidy. Presumably, it therefore already is committing itself to providing this continuing funding in year 4, and in years 5, 6 and onwards. So there you have $8M of the $10M.