Murdochology

James, Wendy and Rupert Murdoch front the British Parliamentary Committee on Media, Culture and Sport, 2011. Image: Sydney orning Herald.

James, Wendy and Rupert Murdoch front the British Parliamentary Committee on Media, Culture and Sport, 2011. Image: Sydney Morning Herald.

Over at the Sydney Review of Books, I’ve got a long-form review essay on two of the latest books out on Rupert Murdoch’s News Corporation and the British phone hacking scandal.

I won’t re-post here, but rather direct you over to the site, which is publishing some very fine work at the moment.

However, the guts of my argument can be summarised as follows:

Back in 2004, reviewing a previous wave of Murdochology that had washed ashore the sandy beaches of the London Review of Books, John Lanchester, following Frederic Jameson, argued that the man himself personified a kind of ‘cultural logic’ of postmodern capitalism. ‘Rupert Murdoch is not so much a man, or a cultural force, as a portrait of the modern world,’ Lanchester wrote, ‘he is the way we live now; he is the media magnate we deserve.’

Lanchester wrote that Murdoch’s singular attribute is his flexibility: a ‘flakiness’ in which ‘the all-over-the-globe nature of the News Corp empire seems to be paralleled by a personal all-over-the-placeness in Murdoch.’ Like the ‘hot money’ of the international currency markets, his energies and attentions flow unpredictably and suddenly, to wherever the opportunity lies. He understands, in the end, perhaps only one lesson: that symbols are powerful, and that in a democracy, this power can be used. One of the things that Murdoch likes to do with his media power is, of course, to make money. But he also likes to acquire more power: for instance, by gaining the ear of prime ministers. You never know when you might need a regulator to sign off on your next deal.

Just like capital, Murdoch can be channelled and regulated, stymied here and divested there. But, like some protean force of nature, he can’t really be stopped. He is too powerful for that, too wealthy, too smart. This is why the common attribution of Murdoch as a ‘media baron’ is so apt. Unlike his deputies, or the CEOs of truly globalised media corporations like Vivendi or Time Warner, Murdoch’s power derives not just from his occupation of a top ‘command post of the social structure’. Like a feudal aristocrat, he also enjoys considerable privileges and resources that attach to his person and family. As long as he keeps hold of those special voting shares in his various corporations, the Bermuda bank accounts and the key trusts and holding companies, he will retain his over-mighty stature. When he dies, of course, all bets are off. The trusts will vest and his children and ex-wives will struggle for control. But for now he is unassailable. As Wolff wrote recently, ‘2014 is going to be a good year for Rupert Murdoch.’

Jo Caust on Australian cultural policy under Labor

Respected South Australian academic and consultant Jo Caust has a new paper out in the International Journal of Cultural Policy. Entitled “Cultural wars in an Australian context: challenges in developing a national cultural policy,” it’s the first detailed academic examination of Australia’s tortuous journey towards a national cultural policy during the six years of the Rudd-Gillard Labor government of 2007-13.

Regular readers of this blog and of my arts journalism will know what a rocky road that was. Labor originally promised a new cultural policy in opposition, under charismatic arts spokesman and later Arts minister, Peter Garrett. By the time that the eventual policy, Creative Australia, was finally announced, it was 2013. Garrett had come and gone as Arts minister, and Labor had also replaced Kevin Rudd as prime minister with Julia Gillard. Creative Australia ended up being the policy of the land for only seven months, with Labor losing the 2013 election.

Caust’s paper covers this history, and analyses the development of Creative Australia and the legislative reforms to the Australia Council that passed the Australian Parliament in 2013. Perhaps her single most salient insight is the degree to which the Canadian model of arts funding has influenced the current reforms. For those who covered the issues on a daily basis for the last six years, there is much that rings true. Although there is nothing particularly new in what she observes, she has done everyone a service by putting it all together in one place. As a result, her paper is a fine summary of the troubled and turbulent political environment under which cultural policy was made during the last government. For international readers in particular, this is a useful ‘first draft of history’ with which to begin the discussion of Labor’s cultural policy legacy. (Disclosure: Caust cites my work frequently in the paper, so I may be biased).

Caust concludes her paper with the following remarks:

From the early part of this millennium there has been much public discussion about the framing and delivery of cultural policy and arts funding in Australia. When a Labor government was elected in 2007 this resulted in a conversation with a select group about the concept of a ‘Creative Australia’ followed by a series of government initiated reviews on aspects of arts and cultural delivery, culminating in the publication of a Creative Australia in March 2013. This document shifted the conversation about cultural policy to embrace a broader definition of culture as well as update, to a limited extent, current approaches to arts funding. At the same time another government initiated review recommended significant changes to the national major arts funding body, the Australia Council. In this process, there was a shift towards more government influence over the workings of the Council while at the same time there was a recommendation for increased funding. However, a change in government 6 months later made the implementation of all of the recommendations unlikely.

In fact in the new Coalition government there is already evidence that there may be significant cuts in funding, and in this likelihood, the high arts would be given preference. In addition a broader embrace of cultural policy issues is unlikely under a Coalition government given their stated resistance to this paradigm. So in the short term any perceived shifts in understanding and valuing of arts and cultural issues in the Australian context, as an outcome of the latest approach to developing an Australian Cultural Policy, may have a limited tenure. Certainly the framing and content of national arts and cultural policies continue to be a political issue in Australia as they are elsewhere. Even so there is also a possibility that the present Coalition Government, while publicly rejecting the framework of Creative Australia, may still embrace aspects of it, if it should suit their political agenda.

$7 billion of neoliberalism

The Stationers' Company mark

The Stationers’ Company: an early example of government cultural policy. Image: Wikipedia.

Australian economist Jason Potts has restarted an important debate about cultural policy in this country with an article entitled “You’ve got $7 billion – so how will you fund the arts?“. I just wish he hadn’t analysed Australian cultural policy from the sort of instrumentalist, neoliberal position we find so familiar in many other spheres of policy debate.

I’ll say right up the top that I’m a fan of Potts’ work, and think him a pretty clever fellow. His work on evolutionary economics is in its own way quite heterodox, and a far cry from the sort of automatic and reflexive market worship we often associate with both the RMIT Economics school, and the Institute for Public Affairs, which he is apparently doing some work with.

On the other hand, his op-ed in The Conversation on cultural policy  is not one of his more perspicacious efforts. Justin O’Connor has already written a useful response, but I thought I’d add a few points of my own, set forth below.

Let’s start by setting forward Potts’ argument. Then we’ll move on to a critique.

Last year the Australian Bureau of Statistics did the maths – government spends about A$7 billion annually in Australia on arts and culture. The exact dollar figure varies depending on what we count, but it includes heritage, broadcasting and botanical gardens, along with all the usual suspects: performing arts, literature, film, visual arts, and so on.

This is apples, oranges and all sorts of random fruit.  “Heritage” funding, for instance, includes such things as war memorials, botanical gardens, zoos and some national parks expenditure. That’s a pretty different sort of thing to grants to game design companies or tax incentives to Hollywood movie studios. Does it actually make sense to treat all of these things as the same sort of expenditure?

Anyway, moving on:

To make this exercise fun, let’s suppose that no political horse-trading was involved in reaching this figure. Let’s assume this figure is the result of disinterested economic calculation of the size of the positive externality in the production of a public good, all wrapped in willingness-to-pay studies, and tied with a big bright cost-benefit ribbon.

So what’s next?

Do we put away our box of shiny economic tools and turn to grubby political compromise to allocate the exact market-failure correcting amount of public funding?

In Australia, as in Europe, this is more or less what we do. Economics to justify an economically efficient level of spending – and politics to implement it.

Really? Last time I looked, in most nation-states, including most democracies, politics is almost always the over-riding factor in the way  budget priorities are set. Sure, politicians and lobbyists and ordinary citizens use economic arguments to make the case for this spending increase or that tax cut. But the process is always and by definition political. On the really big picture stuff, economics arguably can’t really help us. For instance, how much should Australia invest in national defence, or climate change mitigation? The answer depends on inherently political judgments, such as whether you think global warming is real, or the likelihood of a major war.

Indeed, ‘economic efficiency’ is itself an inherently political argument, because it applies a very particular set of assumptions to public policy — namely that Pareto efficiency can actually hold in the first place. In markets in which there is imperfect information — and cultural markets are amongst the most opaque of all — Pareto efficiency may well be impossible. Potts knows this, which is why his quip about the “exact market-failure correcting amount of public funding” strikes me as disingenuous.

So let’s get to the guts of Potts’ argument:

… modern economics suggests that it would be better if we turned the process upside down. Let politicians determine the level of funding in a given area – and let economists determine the allocation.

Why? The political model of funding allocation is very bad at creating – or even recognising – new knowledge. In fact, political allocation mechanisms cause incentives that reward lobbying and punish experimental or innovative thinking.

Only by weakening those incentives can arts and cultural funding seek to be more than a rearguard preservation exercise or sinecure for vested interests.

I suppose it’s something of ad hominem attack to point this out, but it’s just a tad ironic that the person making this argument is a Federation Fellow of a publicly funded Australian university. A person writing for a website, by the way, also funded by universities and the government, using a medium — the internet — that was created almost exclusively by public investment in research.

“Political allocation mechanisms”, by which I think Potts means governments making budget decisions, certainly create incentives that reward lobbying. Then again, so do market mechanisms. Markets require the state to provide a level playing field via such basic institutions as property rights, police forces and courts of law. All of these create incentives for vested interests to plead their cause.

This is no trivial point, by the way: the cultural industries are completely dependent on intellectual property rights such as copyright and patents. The very fact that many cultural goods are non-rivalrous and non-excludable creates huge incentives for content industries to lobby governments to create and strengthen IP regulations — as has been well documented by researchers such as Lessig. When property rights become unenforceable, digital goods become a whole lot less valuable. Anyway, Potts’ claim was that public spending creates lobbying, which is bad. On this analysis, many of the cherished market mechanisms of the cultural industries must also be bad, because they were created via lobbying.

This points to a further naievete: the implicit belief that cultural goods and services are just like any other industrial product.

Even a moment’s reflection shows us this isn’t true. The products of cultural industries are not like any old widget or commodity: they are not even really the same thing as an iPhone or an operating system. Cultural industries produce symbols, and symbols are powerful (or at least highly influential). An aluminium ingot or a wind turbine cannot affect the democratic judgment or voting intentions of millions of citizens. A newspaper empire or television network can.

It doesn’t really matter whether you think that the power of media companies to swing elections is illusory. The history of modern media policy tells us that governments certainly do think symbols are powerful. Media has generally often been heavily regulated, sometimes on the grounds of public interest, but more commonly for naked reasons of political expediency. Even in the US, with its famous First Amendment, successive Washington administrations have had no qualms about controlling spectrum, imposing stringent copyright regulations, and spying extensively on their citizens’ communications. Hosni Mubarak turned off the internet in Egypt for a reason. Whether it’s internet filters or the Stationers Company, the political nature of cultural industries means they can’t be divorced from questions of power.

This curious ignorance of the symbolic reality of culture is often found amongst unsophisticated approaches to cultural economics — much as economics as taught in the modern university tends to ignore key aspects of sociology. As a result, when economists issue prescriptions for cultural policy, they tend to propose cures that are far worse than the supposed disease.

Perhaps this is why Potts misconstrues key facts about real-life cultural policy. For instance, he seems to think arts funding is about “inputs, not outputs”, when in fact nearly all Australian government arts grants are legal contracts specifying outcomes, allowing the government to recoup the funding if not properly acquitted. He also equates prizes as some sort of gold standard of outcome, which is strange because prize committees show exactly the sort of “bullshit” he decries in grant panels.

Similarly, when he argues for “tax credits to anyone – private citizen, corporation, foundation or NGO alike – for spending on arts and culture”, he seems to imply these don’t currently exist. In fact, they do. An individual donating to a DGR-status cultural organisation already receives a tax credit, while a non-profit NGO or foundation already pays no tax beyond the GST.

The minefield of cultural measurement

First published at artsHub, 14 August 2013

Arts strategist Julianne Schultz says we need to start measuring the value of culture, an important but risky venture.

In a speech as part of the Currency House Art and Public Life series in Sydney today, Professor Schulz called on the arts sector to be more ambitious in measuring the intrinsic value of the work produced by artists.

Schultz, who chaired the Reference Group on the National Cultural Policy, said the arts should take advantage of new measuring tools.

For very good reasons we have been diffident about measuring the value of culture. It feels wrong in many ways. We have accepted as a mantra that there are some things that are so intrinsically valuable that they defy quantification. I am not unsympathetic to that view. Robert Kennedy expressed it with great eloquence many years ago, when he decried that we know measure the value of everything except that which is most valuable. In the intervening years new ways of measuring some of these things of value have been created – and that is important. In the arts and culture sector we have opted for a proxy measurement of value, the number of tickets sold, the number of visitors and their multipliers, the profitability of organisations and so on. These are important tools, but not sufficient to capture the public value that accrues from engagement in cultural activities. Thirty years ago environmental value was not something that was measured, now it is. We have to be more ambitious and smarter in finding a way to measure the public value of culture. We know it exists, but we have not yet found the right way to measure it. We have to be more ambitious in measuring the intrinsi’c value of the work produced by artists and the costs that fall disproportionately on them and their families because their work is not properly valued; the institutional in terms of a national ethos which draws visitors or inspires productive innovation; the instrumental value, like the well documented legacy for children of exposure and involvement in arts and culture to successful and engaged lives, and the commercial value which is contributing more to the national economy than many other sectors.

 

It’s not easy being an arts policy nerd. As policy fields go, the area is a lot smaller and less influential than key political battlegrounds like economics, climate change or asylum seekers. Public intellectuals with clout in the field are few in number, and there is no high profile think-tank with easy access to media outlets, like a Climate Institute or an Institute for Public Affairs. Even the vested interests are not particularly organized: industry bodies such as APRA or SPAA don’t strike quite the same fear into a minister’s heart as the Minerals Council of Australia, the Pharmacy Guild or the AI Group.

The thin and patchy nature of cultural policy debate has a number of consequences. One is that discussion tends to languish for long periods. The fitful progress of the national cultural policy towards its eventual outcome in Creative Australia is a good example. First mooted by Peter Garrett as opposition Arts spokesman in 2006, the policy was finally delivered this year.

But the threadbare nature of the cultural policy discussion can have positive consequences too. One is that prominent artists and intellectuals have an unusually strong influence. While the big debates about economic policy are fiercely contested by powerful players, and correspondingly crowded with talking heads, cultural policy is comparatively empty. The few players of significance that do take the field have unusual freedom to move.

Amongst this small coterie, one figure has reached an unquestionable position of influence: Julianne Schultz. From her seemingly peripheral position as the editor of a small but respected magazine, Schultz has spun a web of influence that places her firmly at the centre of the Australian artistic and cultural debate. A key consultant to a succession of Labor arts ministers, Schultz co-chaired the creative stream of the 2020 Summit and went on to lead the reference group for the Creative Australia policy. She’s on the board of the ABC and the Grattan Institute, chairs the Australian Film Television and Radio School, as well as wearing a haberdashery of other hats. When The Australian’s Matt Westwood profiled her last year, she described her intellectual background as ‘broadly cultural, but … from a journalism-media background.’

This breadth of interests and networks makes Schultz a voice worth listening to, especially when, as she did this morning, she advances a bold new policy agenda to build on Creative Australia.

The take-home message of Schultz’ speech this morning concerns the need for an expanded Ministry of Culture. This new super-department would bring together existing federal programs and agencies in a cabinet-level Department. The precedents are strong for such a body overseas: France’s Socialist government of the 1980s was famous for its swashbuckling culture minister, Jack Lang. As Schultz observed today:

At the moment not even all the national collecting institutions answer to the same minister, heritage is in environment, cultural diplomacy and UNESCO are in DFAT, industry assistance for the creative industries is in innovation and climate change, tourism and sport are elsewhere, trade is not linked in any consistent way, broadcasting is in broadband and the digital economy, there are programs in education and health, and regional affairs funds the building facilities and gives prizes for regional arts.

[…]

Such a department would be able to address the cultural sector as a whole, bring a fresh and critical perspective to the sustainability of the component parts with rigorous economic analysis by taking the lead on developing the tools to measure public value.  Its ethos would be sympathetic to cultural potential. It would complement not replicate agencies, like the Australia Council and Screen Australia that allocate funds – so that the arm’s length relationship between cultural production and government, which is so highly valued would be maintained.

Schultz’s proposal is both bold and sensible, and echoes my thinking on the subject; in 2010, I proposed a similarly structured portfolio.

Other aspects of Schultz’ speech are just as interesting, though they will perhaps receive less attention. One argument she makes that could potentially be a game-changer is the need for a much broader and deeper set of cultural statistics and indicators.

‘Thirty years ago environmental value was not something that was measured,’ she points out. ‘Now it is.’

‘We have to be more ambitious and smarter in finding a way to measure the public value of culture. We know it exists, but we have not yet found the right way to measure it.’

There’s no doubt that measurement drives public policy, as the long-running evidence-based policy debate inside the public service amply demonstrates. The ‘poor cousin’ status of the arts and culture within government agencies stems, in part, from the fact that it remains very hard to measure the community value of a beautiful artwork or a provocative documentary. As former top bureaucrats like Leigh Tabrett have told us, the all-powerful central agencies of government – especially Treasury and Finance – are still highly skeptical of the value of the arts and culture, seeing it as warm and fuzzy window-dressing compared to the serious stuff of roads, schools and hospitals.

Echoing an important stream of the academic debate about measuring culture, Schultz says there should be much more effort devoted to measuring the so-called ‘intrinsic’ value of the arts, for instance by using sophisticated tools from economics to measure the ‘contingent valuation’ of the arts by ordinary citizens. So, for instance, the public could be polled and asked what they would be willing to pay for a new art gallery in a regional city, or whether they’d like to spend more on public broadcasting than the ABC’s famous “eight cents a day’. When such exercises have been tried I other countries, they have consistently yielded answers in excess of current government funding levels.

Schultz also says there are a range of other measurements that could better capture the value of the arts, including instrumental value, ‘like the well documented legacy for children of exposure and involvement in arts and culture to successful and engaged lives,’ as well as economic factors, ‘which is contributing more to the national economy than many other sectors’.

It all sounds very useful, and arts advocates would no doubt love extra arguments with which to persuade skeptical razor gangs in Finance and Treasury. But by stepping into the minefield of cultural measurement, Schultz – and Australian culture in general – will need to tread carefully. The most recent attempt to develop such measures in the UK, for instance, developed detailed proposals to measure the value of the arts in Britain using contingent valuation [pdf]. Sadly, they were little help when faced with George Osborne’s austerity drive.

Not all metrics are created equal. Just yesterday, for instance, Essential Research released an opinion poll in which those surveyed said they were unhappy about Australia’s ongoing budget deficit, and would like to see cuts to arts funding to help pay for it. And if there’s one measurement every politician understands, it’s a poll.

Austerity and the social construction of economic knowledge

In a rich and wonderfully detailed 2011 article for the American Journal of Sociology, Donald Mackenzie lays out a case for “The Credit Crisis as a Problem in the Sociology of Knowledge.”

The global financial crisis, Mackenzie argues, was partly the result of particular and contingent “knowledge-generating arrangements”, which allowed the wildly mis-allocated risks of the US mortgage securities industry to accumulate and eventually implode. Research for the paper included detailed interviews with 87 financial market participants. Continue reading

Responding to Steve Kates: more zombie shuffles

RMIT economics lecturer and weird Australian defender of the Romney 47%-thesis Steve Kates has a new blog up called Law of Markets, which is unsurprisingly devoted to Kates’ laissez faire economics and far-right political opinions.

You might recall that I wrote a post a few years back entitled “Don’t study economics at RMIT”, a rather tongue-in-cheek critique of Kates’ baroque views about economics, and the apparent concentration of libertarian economists at that institution.

The original post was in reaction to an op-ed by Kates in the Australian Financial Review, in which he argued that Labor government’s 2009 stimulus package was crowding out private business activity, and therefore causing inflation:

The RBA is continuing to raise rates because the government is taking up domestic savings more rapidly than we are able to generate those savings through productive activity.

In this economy at this time it is the government that is the single most important cause of rising rates. The RBA is only doing what it can to ensure the resources available for investment are properly priced.

As I argued in my original post, Kates’ ideas are highly neoclassical. Dr Kates is a well-known proponent arguing for the resurrection of Say’s Law, a largely discredited economic theory that suggests that demand and supply, by definition, are essentially always in equilibrium.

I criticised it at the time by pointing out that:

One of the implications of Say’s Law is the crowding-out theory of investment, namely, that government investment necessarily diverts the investment in productive capacity of an economy away from private firms. This is why Kates argues that “it is the government that is absorbing our national savings and raising the cost of capital.”

I further argued that there didn’t seem to be much evidence that the government was raising the cost of capital. I pointed out that the government was largely borrowing foreign money through sovereign bond issues, and that Australian firms were having no problems getting access to foreign capital via their own bond issues. So we should expect inflation and therefore interest rates to stay low.

So let’s just fast-forward and ask ourselves: has government stimulus in Australia crowded out private savings and raised the cost of capital?

No. Since Kates’ article, and since my response, Australian inflation has stayed remarkably contained, and interest rates have been lowered, not raised.

But how does Kates react to this reality? By denying it.

Here is his argument:

For me, schooled in the classics as I am, it was as obvious as a cloudless day that the stimulus could never achieve its ends. For virtually the rest of the profession it was not. Why the difference? I base my understanding on the classical theory of the cycle; they base their understanding on Keynes. That’s it. Nothing else.

Kates is so reflexively anti-Keynes that he simply can’t admit that a) stimulus can stimulate, and b) austerity can contract. This means he keeps getting things wrong. In 2010, for instance, he thought stimulus must lead to higher inflation and interest rates. Of course, it didn’t. Now, he believes that austerity is not really contractionary. Of course, it is.

It would be pretty funny, really, if it wasn’t so serious. Basic textbook IS-LM has been remarkably predictive in the current crisis. Pre-Keynesian neoclassical theory has been remarkably useless.

I tried to respond to Kates’ blog post, by the way. He binned my comment in moderation. Classy.

The “three faces of time” in arts participation

Andries van den Broek has a really cool new paper in Cultural Trends this year. It’s entitled “Arts participation and the three faces of time: A reflection on disentangling the impact of life stage, period and socialization on arts participation, exemplified by an analysis of the US arts audience

It’s a really neat way of thinking about the temporal aspects of culture, and completely original as far as I know (though van der Broek points out that analysis of generational cohorts goes back to Comte).

Here’s a taste of his argument:

This is the history of the arts participation of a fictitious character, Pete. At the end of 2013, he’ll be 50 years of age, which implies he was born in 1963. He is not particularly keen on visual arts or theatre, though he visits the odd exhibition and performance. He is more into rock concerts, but also attends the occasional classical music concert and art house movie.

How come his cultural repertoire is like that? Is this typical of his being 50? (Do other people at the same life-stage typically display a pattern like that?) Or, is this typical of 2013? (Does it reflect what is the cultural offer that year?) Or, is it typical of someone who grew up in the 1970s? (Does it relate to a taste pattern acquired in that era?) It’s probably the case that Pete’s cultural repertoire is affected by all three (and, of course, by many other factors too). But, which aspect of Pete’s cultural repertoire can be attributed to the fact that he is 50; which aspect relates to it being 2013, and which aspect to his having grown up in the 1970s?

van der Broek goes on to do some stats on the effects of these three frames, using US data from the NEA’s Survey of Public Participation in the Arts. This allows him to tease out the differences between, say, the formative cultural experiences of generational cohorts from, say, the effects of their life-cycle in determining their participation patterns. Overall, he finds that people are not participating in as much culture as they used to, and that the composition of artforms does change.

And what is that change? One of the main ones is that fewer people are interested in classical music. Younger generations are not replacing the cohorts of classical lovers that are slowly dying.

Most importantly, though, van der Broek finds that arts participation (at least as measured by the NEA) is declining in the US. “All in all, the upshot is that the future of arts participation is not threatened by the cultural behaviour of recent (or future) as compared to earlier cohorts, but by a general decline in arts participation irrespective of cohort (and of age).”

In summary, a really interesting paper and one that I expect I will be returning to.

Back in business

I’m pleased to announce that A Cultural Policy Blog will be returning to regular posts in 2013. 

backinbusiness

It’s been a long hiatus while I prepared and submitted my PhD, but now that’s done, I plan to resume regular posts this year. As well as my weekly column on the Australian cultural industries for Crikey, I’ll be focussing on keeping abreast of recent papers in the field, particularly in relevant academic journals like the IJCP, Cultural Trends and the rest. 

All posts here will also be cross-posted to my personal website over at beneltham.be

Time for a break

I’m taking a couple of months or so off this blog in order to complete my PhD thesis. I’ll be popping up from time to time with a short post or link here or there, but until I finish my thesis I won’t be blogging in earnest. I promise I’ll be back in early July some time with a bunch of new posts!

Until then, you can continue to read my arts column in Crikey every Friday and my regular twice-weekly column about Australian politics in New Matilda.

Australian federal budget 2011: wrap-up of arts and cultural funding

The following article appeared in Crikey on Friday May 13th 2011. 

The 2011 federal budget contained some modest announcements for the arts and culture.

In the Arts portfolio, the government delivered on its 2010 election promise for $10 million over five years in new grants for artists to create work. The funding will support “up to 150 additional artistic works, presentations and fellowships over the next five years through the New Support for the Arts program.”

As well, $400,000 has been found for the federal government’s Contemporary Music Touring Program, a successful program which supports popular mid-level contemporary music acts to tour regional areas.

In broadcasting, $12.5 million has been provided for the proverbially penurious community radio sector, an increase of 25% for a critical area of broadcasting that generally receives very little government support

There was also a package for the screen industry, with a headline figure of $66 million (as we will see, it is actually less than this). Much of the extra money goes to production subsidies through the tax system in the form of lower qualifying thresholds for the Screen Production Incentive. According to Screen Australia, the changes include:

  • Lowering the threshold for Producer Offset eligibility from $1 million to $500,000, for features, TV and online programs

  • Replacing the Producer Offset for low-budget docos with a Producer Equity payment

  • Converting the 65 episode cap to 65 commercial hours for TV

  • Exempting documentaries from the 20% above-the-line cap

  • A reduction in qualifying Australian production expenditure thresholds, and allowances for a broader range of expenses to be eligible for QAPE.

Some really good news is the restoration of the Australian Bureau of Statistics’ screen industry survey, which provided gold-standard data on the state of the industry and which hasn’t been performed since 2007-08 (shortly before the Rudd government slashed funding to the ABS in its first budget).

But how much new money for screen is really here? Go to Budget Paper 2 and you will find that the total extra funding is only $8 million. This is because, quoting from the budget papers, “these changes will be partly offset by $48 million in savings over four years from 2011-12 by removing the Goods and Services Tax (GST) amounts from [qualifying production expenditure] for the film tax offsets and increasing the minimum expenditure thresholds for documentaries to $500,000 in production (from the current threshold of $250,000).”

Money is also being clawed back from cultural agencies through the increased efficiency dividend. Rising to 1.5% in future years, the efficiency dividend hits smaller agencies much harder than big ones. And everything in the arts is small.

The efficiency dividend measures mean the Australia Council is being asked to save $3.3 million over the forward estimates, the Australian Film Television and Radio School will have to find $1 million, the National Film and Sound Archive $1.1 million, the National Gallery $1.4 million, the National Library $2.1 million, the National Museum $1.7, and Screen Australia $759,000. That’s more than $12 million in funding cuts for cultural agencies over the forward estimates.

If we look a little closer at the portfolio budget statements, for instance from the Australia Council, we can see the effects of the efficiency dividend in falling support for artists and cultural organisations. This year there will be “a decrease of approximately $2.5 million in forecast grants expenses compared with 2010-11.” Australia Council grants funding will be only 2% above 2010 levels in 2014-15. But CPI is forecast to run at 3% annually, meaning Australia Council support for artists and organisations will fall in real terms — by perhaps as much as 10%.

In other words, the “New Funding for the Arts” money announced in this budget will be almost completely clawed back by the effects of static funding and the increased efficiency dividend on the Australia Council.

The one really big-ticket spending item in culture was of dubious policy value: the $376 million spend on helping pensioners and senior Australians to make the switch to digital TV. Opposition leader Tony Abbott has already pilloried the program as “Building the Entertainment Revolution”, while our own Bernard Keane and Glenn Dyer have pointed out “the political imperative of ensuring pensioners aren’t left without television as analog signals switch off”.

Personally, I’m sympathetic to the argument that television represents an important human service that allows older Australians to stay connected with the broader community. But the spending program should also be seen in the context of the broader budget, in which $211 million in spending is being “saved” from aged care itself. The government appears to be prioritising access to daytime television over places in aged-care facilities.

Money for art and culture is often spuriously disparaged by critics as diverting resources away from the critical services that governments provide. In reality, of course, the numbers are tiny compared to the investments annually in roads, schools and hospitals. But in this case it really does seem as though the owners of television networks are getting a subsidy at the expense of much-needed investment in aged care infrastructure.