I wrote a book

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It is remiss of me not to mention it here, but last month I published a book. Available now from various Australian bookstores, my first monograph is entitled When the Goal Posts Move: Patronage, power and resistance in Australian cultural policy 2013-2016. It is published by Currency House as part of their long-running Platform Papers series.

The book is a short history of Australian cultural policy in the years 2013-2016, encompassing the end of the Rudd-Gillard Labor government and the first term of the Abbott-Turnbull Coalition government.

This was a tumultuous period in Australian cultural policy. Significant austerity was imposed on federal arts and cultural funding. Around $400 million was cut from the budget of the ABC, and around $300 million from the budgets of federal cultural agencies like Screen Australia the Australia Council for the Arts.

Most controversially, at least for the purposes of readers here, the federal government under former arts minister George Brandis, launched an audacious funding raid on the Australia Council in 2015. $105 million was subtracted from the Australia Council and given to a new cultural slush fund, revealingly entitled the National Program for Excellence in the Arts.

Brandis’ funding raid was about more than just moving the budget line around: it was nothing less than an assault on the institution of the Australia Council itself, and with it a four-decade tradition of arms-length funding decided by artistic peers. The politics were just as blatant: Brandis wanted to punish what he saw as undeserving (and politically suspect) art funded by the Australia Council, and redistribute the money to a palette of works and artforms that he liked: classical Western music and opera, by and large.

The pain of the Excellence raid fell squarely on the parts of Australian culture that many consider to be the most creative and innovative: the so-called “small-to-medium” sector of smaller arts companies, and the great bulk of individual artists and small collectives applying to the Australia Council’s grant programs. In a decision of remarkable cynicism, Brandis specifically ruled that the Australia Council must protect the funding of the 28 so-called “major performing arts” companies that make up the bulk of the Australia Council’s budget, thus making it inevitable that the funding cuts would fall on smaller players.

The Excellence raid revealed major schisms within Australian culture. The Australia Council and its board were shown to be impotent, even supine, in the face of the calculated political assault. Major cultural institutions that many thought would defend their colleagues were conspicuously silent; Opera Australia even welcomed the decision. The Australia Council’s board, which features media celebrities and well-known former artistic directors, said nothing.

The raid sparked national protests from artists and led to a Senate Inquiry, which took 2,700 submissions and issued a scathing report on the government’s actions. It also spurred a remarkable grass-roots protest movement from affected artists and small companies — one that proved surprisingly politically effective — called Free the Arts.

Why was the Australia Council so vulnerable? And what is the future for Australian cultural policy? This paper explores the broader socio-political environment that allowed a conservative government to launch the most damaging attack on the integrity of the Australia Council for forty years. It argues that Australian artists and so-called “cultural leaders” have largely lost or forgotten the vocabulary of public value that might be used to defend the public policy of culture here, a development not unlike that which has occurred in other parts of the public sphere, like universities and public science agencies.

The essay ends with a call to arms to rediscover the ethical and moral imperative of culture making, and the opportunity of convincing fellow citizens of that imperative.

Philip Schlesinger on the “creative industries orthodoxy”

This blog is a long-time fan of the University of Glasgow’s Philip Schlesinger, so it was with great interest that we stumbled across his 2015 lecture to the London School of Economics on that most controversial of cultural ideas, the “creative industries”.

I’ve embedded the video of it below but I’ll make a couple of quick points here:

  1. Schlesinger’s analysis is not new (there have been plenty of descriptions of the way the idea of the “creative industries” has infiltrated many aspects of cultural policy making from the last 1990s onwards)
  2. But it is an excellent summary of the development of the idea and the current state of play. (No doubt critics of this kind of analysis like Terry Flew might beg to differ).
  3. Make sure you watch to the end, because you get a bonus discussion from Angela McRobbie.

 

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.

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.


Where to next for the Google Book Settlement?

This week a US judge ruled against the Google Book Settlement, the latets in a seven year legal saga that I’ve covered in some depth here.

Jerry Brito has a good explainer of the background of the case:

In mid-2005, the Author’s Guild and the American Association of Publishers filed suit to stop Google from scanning any more books. Soon the Author’s Guild’s case was certified as a class-action lawsuit, meaning that anyone who had ever published a book—millions of authors—would be part of the class represented and would be bound by the result of the case.

An Unsettling Settlement

Three years later, after extensive negotiations, the parties announced they had reached a settlement. Google would pay $125 million up front and would then be allowed to continue scanning books and making them available online. More importantly, Google would be allowed to offer not just snippets, but it would be allowed to sell entire text of books as well. The copyright holder would get about 2/3 of the revenues and Google would keep 1/3.

On its surface, the proposed settlement was a boon for all involved. Google would get to continue digitizing books, authors and publishers would get a cut of the profits, and consumers would get universal access to almost all of the world’s books. But reading between the lines, the settlement proved to be problematic.

Because it was a settlement to a class-action lawsuit, it meant that all authors who had ever published a book were bound. Google could scan any book without first asking for permission. If an author didn’t want his book to be scanned or included in Google’s database, he had to contact Google and opt-out. This would have turned copyright on its head.

As a result, many authors protested. The Author’s Guild and the publisher’s association had negotiated on behalf of millions of authors, and many felt the deal didn’t represent their wishes. Almost 7,000 authors wrote to the court asking to be removed from the lawsuit’s plaintiff class.

Saving the Orphans

Another contentious aspect of the settlement was how it treated “orphan works,” books the authors of which are unknown or can’t be found. It’s a well-known problem in copyright that members of Congress have tried to fix several times.

The problem is that if a company like Google wants to digitize a copyrighted book, and it can’t find its author to ask for permission, then its choices are 1) scan the book anyway and face heavy penalties if the author surfaces later and sues, or 2) leave the book undigitized and out of a universal library. As a result, hundreds of thousands of books are in a kind of limbo, not accessible to readers even if the author may well have been fine with digitization.

The Google Books settlement presented a solution to the problem. Because it bound all authors—-known and unknown—-Google could proceed to scan orphan works without having to worry. If an author later surfaced who didn’t want his book used, he could no longer sue Google. He could opt-out of the program and claim a check for the revenues associated with his book, but no more.

Some welcomed this solution to the problem, but others, including the Department of Justice, pointed out to the court that it would give Google a monopoly over orphan works. Because the settlement would only apply to Google, if another party like Amazon or the Internet Archive wanted to create its own digital library that included orphan works, it would not get the same protection.

And it wouldn’t be easy for other to get the same deal. Short of Congressional action, the only way a company like Amazon could get similar treatment would be to settle a class action suit of their own—a very difficult and time-consuming set of events to replicate. Additionally, because the authors and publishers who negotiated the Google deal are getting a cut of revenue, some have suggested that it would be in their interest to make sure Google remained a monopoly and would therefore not settle as easily with other parties.

What’s Next

Because class-action lawsuits can be as controversial as this one, the law requires that a court approve a settlement before it becomes binding. The court accepted over 500 briefs from various parties supporting or opposing the settlement and early last year held a hearing on the fairness of the settlement. It rejected the case yesterday.

The options available now to Google and the authors and publishers are:

  1. Continue litigating the original lawsuit, which is an unlikely scenario.
  2. Amend the settlement to make it opt-in, meaning that authors would have to give permission before their books are scanned.
  3. Appeal the judge’s decision to a higher court.

Judge Chin seemed to invite a new settlement, saying in his opinion that “Many of the concerns raised in the objections would be ameliorated if the [settlement] were converted from an ‘opt-out’ settlement to an ‘opt-in’ settlement.”

In the New York Times, Robert Darnton, himself a librarian and a strident if highly-0informed critic of the deal, weighed in with this opinion piece:

This decision is a victory for the public good, preventing one company from monopolizing access to our common cultural heritage.

Nonetheless, we should not abandon Google’s dream of making all the books in the world available to everyone. Instead, we should build a digital public library, which would provide these digital copies free of charge to readers. Yes, many problems — legal, financial, technological, political — stand in the way. All can be solved.

The Chronicle of Higher Education carries a good interview with Pamela Samuelson:

It’s the only ruling really that the judge, I think, could have made. The settlement was so complex, and it was so far-reaching. With the Department of Justice and the governments of France and Germany stridently opposed to the settlement, it seems to me that the judge really didn’t have all that much choice. So the ultimate ruling, that the settlement is not fair, reasonable, and adequate to the class, is one that I think was inevitable.

The thing that surprised me about the opinion was that he took seriously the issues about whether the Authors Guild and some of its members had adequately represented the interests of all authors, including academic authors and foreign authors. That was very gratifying because I spent a lot of time crafting letters to the judge saying that academic authors did have different interests. Academic authors, on average, would prefer open access. Whereas the guild and its members, understandably, want to do profit maximization.

The EFF’s Corynne McSherry has this analysis:

On the policy front, the court recognized – as do we – the extraordinary potential benefits of the settlement for readers, authors and publishers. We firmly believe that the world’s books should be digitized so that the knowledge held within them can made available to people around the world. But the court also recognized that the settlement could come at the price of undermining competition in the marketplace for digital books, giving Google a de facto monopoly over orphan books (meaning, works whose owner cannot be located). The court concluded that solving the orphan works problem is properly a matter for Congress, not private commercial parties. Sadly, Congress has thus far lacked the will to do so. Perhaps yesterday’s decision will finally spur Congress to revisit this important issue and pass comprehensive orphan works legislation, that allows for mass book digitization.

That said, the court also got some things fundamentally wrong in its copyright analysis. For example, it states that “a copyright owner’s right to exclude others from using his property is fundamental and beyond dispute” and then proceeds to quote at length from the letters of numerous authors (and their descendants) who share the misguided notion that a copyright is, by definition, an exclusive right to determine how a work can be used. We respectfully disagree. Copyright law grants to authors significant powers to manage exploitation of creative works as a function of spurring the creation of more works, not as a natural or moral right. And those powers are subject to numerous important exceptions and limitations, such as the first sale and fair use doctrines. Those limits are an essential part of the copyright bargain, which seeks to encourage the growth and endurance of a vibrant culture by both rewarding authors for their creative investments and ensuring that others will have the opportunity to build on those creative achievements. Thus, as the Supreme Court has explained, such limits are “neither unfair nor unfortunate” but rather “the means by which copyright advances the progress of science and art.” If the legal issues raised in the underlying lawsuit are ever litigated on the merits, let’s hope this or any future judge keeps the traditional American copyright bargain firmly in mind.

Michael Liedtke of the Associated Press thinks this is a micvrocosm of the larger anti-turst and monopoly challenges facing Google:

This week’s ruling from U.S. Circuit Judge Denny Chin did more than complicate Google’s efforts to make digital copies of the world’s 130 million books and possibly sell them through an online book store that it opened last year. It also touched upon antitrust, copyright and privacy issues that are threatening to handcuff Google as it tries to build upon its dominance in Internet search to muscle into new markets.

“This opinion reads like a microcosm of all the big problems facing Google,” said Gary Reback, a Silicon Valley lawyer who represented a group led by Google rivals Microsoft Corp. andAmazon.com Inc. to oppose the digital book settlement.

Google can only hope that some of the points that Chin raised don’t become recurring themes as the company navigates legal hurdles in the months ahead.

The company is still trying to persuade the U.S. Justice Department to approve a $700 million purchase of airline fare tracker ITA Software nearly nine months after it was announced. Regulators are focusing its inquiry into whether ITA would give Google the technological leverage to create an unfair advantage over other online travel services. Google argues it will be able to provide more bargains and convenience for travellers if it’s cleared to own ITA’s technology.

In Europe and the state of Texas, antitrust regulators are looking into complaints about Google abusing its dominance of Internet search to unfairly promote its own services and drive up its advertising prices.

And Google is still trying fend off an appeal in another high-profile copyright case, one stemming from its 2006 acquisition of YouTube, the Internet’s leading video site. Viacom Inc. is seeking more than $1 billion in damages after charging YouTube with misusing clips from Comedy Central, MTV and other Viacom channels. A federal judge sided with Google, saying YouTube had done enough to comply with digital copyright laws in its early days.

One of my favourite comentators on Google is of course the one-and-only Siva Vaidhyanathan, who is quoted in this excellent Inside Higher Ed piece:

Siva Vaidhyanathan, a media studies professor at the University of Virginia and a notable Google gadfly, said the company overplayed its hand by essentially trying to rewrite the rules governing the copying and distribution of book content through a class-action settlement. “Google clearly flew too close to the sun on this one,” he wrote in an e-mail. “…This is not what class-action suits and settlements are supposed to do.”

Vaidhyanathan said that Google now faces the choice of either continuing to fight for its interpretation of copyright law in the courts or scaling back its plans for a digital bookstore. “If Google decides to take the modest way out, it can still ask Congress to make the needed changes to copyright law that would let Google and other companies and libraries compete to provide the best information to the most people,” the media scholar says. “Congress should have been the place to start this in the first place.”

 

 

 

 

The Australian government reviews its tax concessions to independent film production

The following article appeared in Crikey on March 4th:

The federal government has just finished a review of federal film financing arrangements — and given itself a rather large pat on the back. The result is an endorsement of film financing arrangements in which more and more taxpayers money is being given to Hollywood studios.

Confirming Sir Humphrey Appleby’s famous principle that you should “never commission an inquiry without knowing the outcome first”, the federal Arts Department’s 2010 Review of the Australian Independent Screen Production Sector makes a series of rosy findings about the state of the sector and the effectiveness of the government’s Australian Screen Production Incentive, a large tax refund to film producers.

More money is certainly leaving Treasury coffers: the report states that “in the three years since the introduction of the Australian Screen Production Incentive, the government has provided $412.1 million in support through the tax system, compared to $136.7 million in the three years before the package.”

But delve further into the report, and all sorts of questions start to pop up. First and foremost is the crucial question of whether those extra taxpayer dollars are really stimulating an upswing in domestic production across the board, or merely co-financing large Hollywood studio films such as Happy Feet 2 and Australia.

Arts Minister Simon Crean trumpeted the review’s findings. “The boost in government funding is a great achievement and contributing to the viability of the local film production industry,” he announced in a media release.

“Although it’s still early days, the increase in activity, particularly the production of Australian large budget films, such as Baz Luhrmann’sAustralia and George Miller’s Happy Feet 2, and the box office performance of films such as Tomorrow, When the War Beganshows the government support for the sector is having a significant impact.”

In fact, a close reading of the review suggests that the effect of the new funding arrangements is far less positive than the minister and the department claim. Much of the extra money — $169 million, in fact — has gone to foreign movie studios in the form of international production subsidies, though that’s not a fact that the review chose to highlight. But despite this, levels of foreign production in Australia have actually been falling, as the strengthening Aussie dollar and strong competition from other countries and locations have made the foreign production incentives less attractive.

More private investment has been attracted to Australian feature films, however, and more films are being made. Despite this, the domestic box office takings of Australian feature films has risen only slightly, from 3.8% between 2005-2007 to 4.4% in 2008-2010. That’s better than the subterranean levels of 2004, but still worse than the performance of Australian features in the early 2000s — let alone the 1990s.

As for television, the report found that while drama budgets had increased, total hours for Australian-produced adult television drama had remained steady. The reason? Television production is driven by local content quotas. To quote the report, “Australian television production levels remain stable over time and are closely linked to requirements under the Australian Content Standard.” In other words, the television networks are receiving more taxpayers money to produce drama that they are required to by the regulations. It’s a nice deal if you can get it.

Most of the money continues to flow to the big productions, such as Luhrmann’s upcoming Great Gatsby. These are loved by the industry, as they provide lots of employment for local casts and crew. But the review points out that a large part of the Australian screen sector is made up of small companies, many of which produce documentaries. These smaller firms have struggled to access the tax refunds, owing to high production thresholds. Features and documentaries made for less than $1 million or $250,000 respectively are ineligible for the offset, ruling out a large swathe of the independent sector.

Yet the review thinks this is a good thing, as it precludes the low-budget and arthouse features and documentaries that would be unlikely to make a return in any case. “Lowering the offset threshold for feature films to ensure access for emerging producers would to an extent alter the intent of the offset,” it says, “from one encouraging commercially focused features, to one that includes films less likely to be market and box office driven.”

The review confirms a subtle shift in Australian screen funding priorities away from backing emerging film-makers and new voices and towards big budget, Hollywood-financed productions. This may result in bigger box offices for bigger-budget Australian films — or it may not. The federal government’s last effort at supporting commercial film finance was the Film Film Corporation, a 20-year initiative that acted as a for-profit investor in feature production. The FFC lost more than a billion dollars in that time-frame, booking investment returns of negative 80%.

The new policy gets around this problem by simply giving tax refunds to big producers, regardless of how much money their film eventually makes. And it’s uncapped and open-ended: the bigger the budget of the film, the larger the taxpayer contribution.

The Australia Council’s recent Arts and Creative Industries report

The following article appeared in Crikey on February 4th. There’s been quite a bit of debate over at Crikey in the comments pages of this article, so head on over to see the discussion.

The plan to provoke a profound shake-up to the arts

In a week where so much has happened in the world, it’s not surprising a report from the Australia Council has not made the news. But in the rarefied atmosphere of arts policy, the release of a report entitled Arts and creative industries will make waves — the document, if followed to its logical conclusions, implies a profound shake-up to the current status quo. 

Authored by a team of QUT academics led by Professor Justin O’Connor, Arts and creative industries is a long, detailed and rigorous examination of the context, shape and setting of arts and cultural policy in Australia. It’s not quite the Henry Tax Review, but it’s certainly the most academically informed piece of research to be released by the Australia Council in a long time.

Beginning with a historical overview of 19th century culture and the genesis of “cultural policy” in postwar Britain, the report then examines each of the issues that has bedeviled the arts debate: the role of public subsidy, the growth of the industries that produce popular culture, the divide between high art and low art, and the emergence of the so-called “creative industries” in the 1990s. It’s as good a summary of the current state of play as you’re likely to find anywhere, including in the international academic literature.

O’Connor and his co-writers conclude that “the creative industries need not be —  indeed should not be — counter posed to cultural policy; they are a development of it” and that economic objectives (in other words, industry policy) should be a legitimate aim of cultural policy.

Taken as a whole, the argument has big implications for the way Australia currently pursues the regulation and funding of culture. For instance, it argues that “the ‘free market’ simply does not describe the tendencies of monopoly, agglomeration, cartels, restrictive practices, exploitation and unfair competition which mark the cultural industries” and that this in turn justifies greater regulation of cultural industries like the media. That’s a conclusion that few in the Productivity Commission or Treasury — let alone Kerry Stokes or James Packer — are likely to agree with.

The report also argues the divide between the high arts and popular culture has now largely disappeared, and that therefore “it is increasingly difficult for arts agencies to concern themselves only with direct subsidy and only with the non-commercial”. This is an argument which directly challenges the entire basis of the Australia Council’s funding model, in which opera and orchestral music receives 98% of the council’s music funding pie. No wonder the Australia Council’s CEO, Kathy Keele, writes in the foreword: “This study proposes to challenge many of our current conceptions, definitions, and even policies.”

Intriguingly, the report stops short of any concrete policy recommendations. Perhaps this is because some existed, but were excised from the report. Or perhaps it’s because any recommendations that genuinely flowed from this report would imply the break-up or radical overhaul of the Australia Council itself.

As Marcus Westbury this week observed in The Age: ”While the Australia Council isn’t backward in promoting research, reports and good news stories that validate the status quo, there is not much precedent for it challenging it.”

That’s because the real guardian of the current funding model is not the Australia Council, but the small coterie of large performing arts companies and high-status impresarios that are its greatest beneficiaries. It won’t be long before a coalition of high arts types, from Richard Tognetti to Richard Mills, start clamouring to defend their privilege.