Stabilising arts funding by Gunduz Kalic

In making his first appointments to the Australia Council board last week, the Federal Minister for Communications and the Arts, Senator Richard Alston, finally seems to have unveiled the Coalition’s “core” arts policy: “there simply isn’t going to be the ongoing level of government funding - that’s federal and State - to meet legitimate expectations...we don’t want a culture of dependency in  this country.”

Alston’s previous “don’t startle the horses” approach has successfully neutralised the once explosively vocal arts lobby.  But, in the face of further arts spending cuts - those already scheduled and those to come - will the arts community remain quiet?

Hell hath no fury like an artist scorned, and, as former Liberal MP John Hyde has pointed out, the arts have considerable power to influence community attitudes.  Much will depend on whether Alston is merely implementing budget cuts in his portfolio area - or, instead, has a coherent, constructive strategy for rolling back the “culture of dependency” that traps much of the Australian arts.

The arts industry needs the Minister to set out a clear, transparent policy direction for the years ahead.  In particular, worrying deficits run up by Australia’s flagship performing arts companies last year highlight a need for innovative strategies to make arts companies more financially independent.

Elsewhere in the West, the deterioration in “revenues” received from government has triggered a search for innovative arts financial solutions.  One such is “stabilisation funding”, invented in America and credited there with providing many troubled arts organisations with a new lease on life.  The concept is now spreading to the UK.

Expressly designed to inject working capital into subsidised arts companies with chronic defiicits, stabilisation funding aims to gradually transform grant-addicted organisations into pragmatic arts businesses increasingly capable of standing on their own two feet financially.  In the American version, which is structured as a loan scheme, stabilisation dollars cannot be used to retire accumulated debt, but must be used for cash-flow needs over the loan period.

In the UK stabilisation has been hailed by arts industry newspaper The Stage as an arts policy breakthrough “having the potential to save subsidised theatre”.

One English company receiving pilot stabilisation funding is The Birmingham Repertory Theatre Company.  Its general manager, John Stalker, is channelling much of his company’s stabilisation grant into “research and development” of commercially exploitable new product and joint ventures with television.

Could stabilisation wean the Australian arts from financial dependency upon government?  A coming shift in Australia Council funding arrangements - from an annual to a triennial basis - will, in practice, mean that a number of second-tier, non-flagship arts companies will lose Commonwealth funding, except on a special, one-off basis.  Perhaps, then, it would be prudent federal arts policy to select several of these “at risk” companies to be trial recipients of stabilisation funding in Australia. 

This article appeared in the Australian Financial Review, April 4, 1997.