Australian Major Performing Arts Group (AMPAG) dinner
Tuesday 5 September 2006
Speech for the Minister for the Arts and Sport, Senator Rod Kemp
Check against delivery
Thank you Derek [Young, Chair, AMPAG]
I am delighted to be here this evening.
I understand that you have had a very productive day discussing critical topics for Australia 's cultural sector including arts philanthropy, governance issues and the way forward with the 2007 AMPAG work plan.
As representatives of the most significant performing arts companies in Australia , you have a role not only within the performing arts sector, but also across the broader Australian community.
You are literally Flagship Companies in your fields, with all the status and responsibility that implies. And with the sort of funding that such a status attracts.
Government Support for the Major Performing Arts
I think it is fair to say, that most of the Major Performing Arts Companies in Australia have never been in as good a shape as they are today, and have never been so well supported.
In the last financial year, the 29 Major Performing Arts companies received over $78 million in funding from the Australian Government, and over $109 million in total funding from governments.
When you include the funding recently announced for the orchestras following the Strong Review, the level of support from the Australian Government alone rises to something close to $88 million next year, and then approximately $82 million per annum ongoing.
This is more than half of the Australia Council's total annual appropriation.
To give you some further context on these figures,
$88 million will be a 50 per cent increase on the level of funding provided to the Major Performing Arts companies in 1997—before the Nugent Inquiry.
On top of that funding there have been other Australian Government initiatives which have provided further increases in funding for Major Performing Arts companies.
AMPAG made the case about the impact of the efficiency dividend on your base funding, and the Government listened – providing an additional $4 million to Major Performing Arts companies, not including the $5m over four years included in the orchestras package.
Major Performing Arts companies continue to access over $2 million annually for touring across Australia through the Australian Government's performing arts touring program, Playing Australia.
Your companies have also benefited through other Australian Government initiatives, accessing funding for Young and Emerging Artists programs, for international visits, and in the case of the Australian Chamber Orchestra, to establish a second ensemble. – But more on this later.
Funding Model Review
I know that the one thing which is uppermost in your minds right now is the outcomes of the second Funding Model Review.
While you will be interested in funding, and what it will mean for your companies, I am interested in what the outcomes will tell me about the success of the whole approach, and about what we still need to do.
When Helen Nugent set about framing the recommendations of the Major Performing Arts Inquiry back in 1999, she was both responding to the need to address structural issues with the sector, and quite purposefully setting the scene for the major performing arts companies into the future.
In simple terms, the bargain struck was to increase and stabilise funding for MPA companies, determined on a transparent and predictable basis, in return for the commitment of your companies to build strong business and artistic planning processes, and for continuing the drive to increase revenue from non-government sources.
This stability is vitally important because performing arts companies are important cultural assets—for all Australians.
In 2003, when the first review of the funding model was conducted, it showed that companies had, on the whole, achieved significant improvements in levels of earned income and in net asset position.
There was also an increase in main stage performances and enhanced artistic vibrancy, with a marked increase in new works being produced.
Boards and Managers clearly understand the great importance of taking active responsibility for the financial health of your organisations.
You develop and stick to business plans, you map out risk, you build partnerships with sponsors, you manage and guide these organisations.
And you have been doing this with increasing success.
You would be aware that the second review of the funding model is now complete.
All of you were consulted during that process and I thank you once again for your contribution to that process.
I've had a look at some of the preliminary figures from the review taken from 2004, and they show that the majority of major performing arts companies are now financially stable, and producing more new works than in previous years.
In terms of the key performance indicators, the number of new works presented exceeded all years since 2001 and the number of Australian works presented throughout the year exceeded all years since 1999.
Across all companies, assets, box office and private sector income have increased leading to a net surplus result.
Through initiatives like the reserves incentives scheme, many companies are additionally now building healthy reserves to enable them to work through periods of change or difficulty.
You should be proud of these achievements. Performance like this derives, I believe, from more robust business practices, increased flexibility and a growing understanding about the needs and interests of audiences.
These factors, in my view, are what help the best performing companies to thrive in what is a highly competitive environment for the entertainment dollar, the sponsor's dollar and the government dollar.
T hat said, I am aware of the pressures you continue to face across a range of areas:
- The costs of compliance and good governance are increasing. These costs seem to me both important and unavoidable if sound business practices are to be sustained.
- Venue costs are increasing and international touring is becoming more difficult.
- While individual philanthropy and corporate sponsorships are increasingly more important, many of you continue to face challenges and growing costs in attracting and maintaining sponsors and donors.
- Critically there is a fundamental need to ensure that you continue to remain relevant to audiences.
I am aware of these concerns and want to assure you that they are being considered and addressed in the processes which follow the completion of the report.
I will be discussing possible new funding for major performing arts companies with my State colleagues when the report is considered at the Cultural Ministers Council in a few weeks time.
If my State colleagues are willing, I could reasonably expect to be taking forward a proposal in the next Australian Government Budget processes.
Sponsorship and philanthropic income
While the Government is doing a lot in the area of sponsorships and philanthropy through the excellent programs of the Australian Business Arts Foundation—AbAF—and through tax incentive mechanisms, it is important that performing arts companies continue to work attract increasing support from the private sector, through philanthropy and sponsorship.
As AMPAG members are aware, corporate sponsorship and philanthropic income are increasingly important components of the income mix of cultural organisations.
They are also an important in planning for the future and long term sustainability of the sector.
I have followed with interest the joint research project of the Australia Council Major Performing Arts Board and AMPAG.
This project tracked the changes in corporate sponsorship and private donations to AMPAG companies from 2001 to 2005.
I note the phenomenal 85 per cent increase in total donation income over the five year period—from over
$7 million in 2001 to more than $13 million in 2005.
Indeed, in one year from 2004 to 2005, $4 million or a
43.7 per cent increase.
Corporate sponsorship remains vital, and the report indicates that it has continued to grow, although at a much slower rate. I am concerned at this, and I know that for some companies the loss of key sponsors is a considerable setback.
I would encourage you to continue to work with AbAF to improve the situation, and I can assure you that I will continue to make the case to business.
Future Issues - Education and the Arts
As I look to the future for the performing arts sector in Australia , I continue to be moved by the argument that we must invest in the education of the audiences of tomorrow.
I have taken a great interest in the review of music education in schools, and participated in a national forum which was held in Canberra last month.
While I will not pre-empt the Government's response to the outcomes of that forum, I will say that there is room to look at what can be done to bring artists and arts companies more closely into education.
I think that some of the ideas that AMPAG has brought forward in this area are worthy of consideration, such as ‘Playing the Schools' which would see funding for touring performances into schools and students into theatres.
- I hope that you have also sought to make the case to State Education Ministers and to ask about what initiatives they may have in this area.
I should point out that the Australia Council already supports 44 organisations including some major performing arts companies, which deliver music education programs and services to children and young people.
These initiatives are important, but the critical point is that they work best when they actively involve participation by students.
I am also interested in what more can be done in terms of developing a national model curriculum—particularly for music—but also more broadly across the arts.
Cultural Ministers will shortly be considering a national statement on education and the arts which will start to put a national policy framework around some of these issues.
The statement will be jointly approved by the Education and Youth Affairs Ministerial Committee.
As many of you will know, I am supportive of ideas to increase the amount of international touring by high quality Australian performing arts companies. And many of you have been touring, often to critical acclaim and full houses of appreciative audiences.
- In February 2006, Sydney Theatre Company presented Hedda Gabler with Cate Blanchett in New York , showing to sellout houses.
- The WASO toured China in May 2006.
- The ACO played Carnegie Hall in 2005, and has toured Europe extensively in 2006.
- Bangarra will have a major tour of the UK this year; and
- Circus Oz will tour North America – the perfect response to that other Canadian circus company coming down under!
From my recent visits to China and Japan, though, and from first hand reports from companies like Opera Australia I know that there are performing arts centres with world class facilities, particularly in Asia, are crying out for high quality Australian performances. These include locations like Tokyo , Shanghai , Beijing and Taipei – considerable markets!
Some companies, such as the ACO, are working towards developing a second ensemble, which will give them flexibility to take part of international opportunities while still performing for Australian audiences.
Opera Australia has also advised me that touring opportunities are opening up around the region.
I'm interested in these sorts of ideas, as I believe there is a considerable opportunity in international touring for you as companies, and to help Australia further the national interest through public diplomacy.
On the domestic front, I am sure you are all aware of the recent visit by OzOpera to tiny Morundah, population 15. This visit not only generated considerable publicity, but highlighted the considerable potential for our performing arts companies to contribute to successful community events.
I am keen to facilitate more domestic touring by our performing arts companies, particularly to remote and isolated communities.
In summary, for my part, I will continue to welcome your ideas on how together we can meet the challenges ahead and take advantage of the opportunities for the arts now, and into the future.