Archive | May, 2018

What’s in it for Arts?

26 May

An artist’s guide to the ACT Budget

– by Jack Lloyd

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The ACT Budget will be unveiled on Tuesday, 5 June 2018, and each year the Budget has a real impact on the level of arts activity, services and opportunities in the ACT.

Inspired by Ben Eltham’s Handy Guide to Reading Government Budget Documents, I wanted to help artists and arts supporters in the ACT to find and understand these impacts as quickly as possible.

The Budget can be a daunting piece of work, with hundreds of pages to sift through and a lot of technical language. But if we know what we’re looking for it’s a lot easier.

We’ll be breaking down the whole budget to find every little scrap of arts info we can get our hands on. Let’s get stuck in, hey?

 

What’s In There?

New funding for announcements and initiatives, and changes to existing construction budgets.

 

What’s Not In There?

Aside from the total level of arts and cultural funding in certain areas, cuts to individual programs or funding areas are often invisible. Anywhere that funds are transferred within a budget, including artsACT’s funds, are not generally shown. The details of artsACT’s expenditure is partially disclosed in advance from time to time within their communications about successful grantees, and fully disclosed only after the end of the financial year, within the Chief Minister, Treasury and Economic Development Directorate (CMTEDD) Annual Report.

 

The Budget Document

Each year the budget is comprised of three papers, and a set of Budget Statements. We’ll go through each section. The images below are all from the 2017-18 ACT Budget.

However, Budget formats change from year to year and new elements may be added, so read tables of contents to see if any headings appear new and relevant, or look to the ACT Government Budget Reading Guide for help.

 

The Budget Papers

Budget Paper 1 – Budget Speech

The word from the Chief Minister, with key announcements and overall themes. We obviously hope to see major arts investments announced and celebrated as an important part of the ACT’s character and direction. This section provides context to any discussions about what is funded in a given year.

Read this first.

 

Budget Paper 2 – Budget in Brief

This paper is divided by type of service to the public, and can be short on detail especially on small initiatives. It never, ever talks about bad news.

Initiatives are grouped under press-friendly headers like “More and Better Jobs” or “Better Support when it Matters”. These titles can give an idea as to what the Government’s priority might be in approving that initiative, but they cut across all kinds of activity so any category may have arts implications.

It’s worth browsing each category to learn what the Government’s priorities are and what language they use to describe them. These categories appear in the next section as well. Key expenses are localised on the Town Centre Map.

Budget Paper 3 – Budget Outlook

The real budget. “Announcements” live in the New Initiatives chapter and if you want to skip to the good bits, head there straight away.

Going chapter by chapter:

1. Economic Performance, Outlook & Strategy

High level analysis of major trends such as demographics, housing, employment. No arts details.

2. Fiscal Strategy

The guiding principles and influences the Government has applied in making its decisions, eventually expressed as a summary of the cost of living for various hypothetical Canberrans. No arts details.

3. New Initiatives

Here’s the main event. Head straight to the Summary of expenses by portfolio (Previously at Table 3.2.2)

This summarises all “Initiatives” – new activity spending introduced to this year’s Budget, projected over the coming four years.

Most arts initiatives will be included in the CMTEDD section, as well as under Cultural Facilities Corporation. Other arts opportunities could be elsewhere if they are delivered by other directorates – for instance, arts and health could be a Health initiative. Titles here are brief. This is all the new money. Negatives are either cuts or savings.

Each line has a corresponding detail breakdown entry in the following pages which explains what the initiative is in a sentence or two. This is what the funding will be used for.

Next take a look at Infrastructure and capital initiatives (Previously at Table 3.3.2)

Here is the summary of new infrastructure and capital initiatives for this year’s budget. As above it shows a four year projection, which can help to understand when a project is expected to be finished.

Once again, each item has an entry in the following pages with a sentence or two, which goes into more detail about when the capital is being invested, when depreciation commences, and any offsets (say, no longer having to hire the equipment, more efficient running costs, or if funded through the Better Infrastructure Fund for new improvements to existing infrastructure).

4. Expenses

A high level overview of major influences on expenses. The closest thing we have here is “Recreation and culture” which is not detailed enough to learn much from. That said, we probably don’t want to see any arts activity mentioned under “Savings”.

5. Capital Works

This section has a summary of new capital works – building projects – which might include arts facilities, but is not an exhaustive list, unlike the initiatives section. Works in progress also appear here in summary, but for full detail see the Appendix – Capital Works – Works-In-Progress.

6. Revenue

Levies, taxes and service charges. No arts details.

7. Federal Financial Relations

National Partnership Payments are Federal Government programs delivered via the ACT Government. At least recently, no arts details, but details of Federal arts projects could conceivably show up here.

8. Asset and Liability Management

The Government’s assessment of the value of its assets and liabilities at a high level including things like Territory debt, investments, loans and superannuation. No arts items.

9. GGS Harmonised Financial Statements

The ACT’s formal, standardised financial statements. Table 9.10 includes a breakdown of General Government Sector expenses by function, one of which is “Cultural Facilities and Services”, which may be worth comparing to previous year’s estimates for big shifts. “n.e.c” means “not elsewhere classified”.

10. Appendices

Further background information, some of which can be important.

Capital Works – Works In Progress shows ongoing projects, which may have changed in scope. Current end dates are shown, which can be relevant to know when arts infrastructure is coming online.

Details about changed budgets for capital projects – up, down, sooner or later – are now only found in the separate Budget Statements A-H so look there for more details.

 

Budget Statements A-H

These are a detailed breakdown of the budget, sorted by Directorate.

The most relevant of these is Budget Statement B – CMTEDD.

ArtsACT/Events ACT funding is included under the CMTEDD section, and the Cultural Facilities Corporation has its own section.

This document summarises priorities and may give some background to items included within the Budget Outlook.

It also has the closest thing to an annual ACT “arts budget”.

It shows the targets and KPIs that the Government has set for its arts program outputs. In 2017-18 these were Output 3.5: “Arts Engagement” and include total cost of Arts Engagement. Comparing to previous years is a reasonable gauge of increases or decreases to arts funding. Output 3.4: “Events” may also be useful to compare between years.

Controlled Recurrent Payments” in these sections means the amount that Territory Entities (in this case artsACT) receive for the delivery of services (including passing money on as grants to artists and organisations), and “Total Cost” is the sum of all expenses for those entities.

Basically, the payments are the slice of the budget going to different bits of the government as income so they can operate. The Total Cost is all their expenses. Scroll down a bit for another example – the Cultural Facilities Corporation’s operating budget from the Territory is its “Controlled Recurrent Payment”, while its “Total Cost” is all its expenses including employees, operating costs, and depreciation of assets.

There is also a table of key targets that artsACT will be aiming to achieve in the coming year.

Changes to Appropriation details all variations to the budget made in the previous year, and impacts of new policies. Significant changes should be identifiable in the Budget Outlook. This section also details budgets shifting between Directorates when responsibilities change.

Cultural Facilities Corporation’s section is self-contained and has a breakdown of their key activities, future priorities, employment levels, any new expenditure projects, and an operating statement. For structural reasons, the CFC posts a loss each year roughly equivalent to their depreciation expense, and where Theatre trading performs ahead of the budgeted loss this is added to the Theatre Reserve.

That’s all, folks

That about wraps it up!

I’m hopeful we’ll see some good stuff in the Budget this year, both for artsACT funded activity by artists and arts orgs, maybe some more detail on the festivals and events promised before the last election, and maybe even seeing the ball start rolling for the Cultural Facilities Corporation and their long-awaited new theatre.

Tuesday 5 June is the day to watch. I hope this was helpful, and if you have any questions, or anything you spot that I’ve missed, let us know!

 

Childers Group submission into the National Inquiry into Canberra’s National Cultural Institutions

15 May

8 May 2018

Committee Secretary
Joint Standing Committee on the National Capital and External Territories
PO Box 6021
Parliament House
Canberra ACT 2600

Phone: +61 2 6277 4355
Fax: +61 2 6277 4863
jscncet@aph.gov.au

 

National Inquiry into Canberra’s National Cultural Institutions

Childers Group Submission

Introduction

The Australian Government’s major cultural institutions have clearly defined roles and responsibilities set out in their guiding legislation. They play significant leadership roles beyond collecting and exhibiting material – roles that are often not clearly understood. They have very specific requirements to enable effective and innovative operation, including a body of highly specialised staff with long-established national and international professional networks that contribute to the successful implementation of programs addressing each of the issues contained in the terms of reference.

These highly specialised institutions are very different from government departments, which have much more room to adjust to major funding cuts, and especially to the application of ‘efficiency dividends’. The issues identified in the Terms of Reference are ones with which they have been grappling for the last two decades. However, in the strategic and funding context in which they have been operating, including the mounting impacts of a cumulative ‘efficiency dividend’, such efforts have only partially reduced an ongoing decline in services.

The Childers Group* makes the following observations under each of the Terms of Reference.

1. Creating a strong brand and online presence:

Digital demands and the knowledge economy: These responsibilities have been expanded by the changing demands of the digital world and the public expectations of ever-broader access to their collections, knowledge and expertise. As custodians of significant reservoirs of publicly owned content, they also have an important role to play in the new clean and clever industries of the future that comprise the growing knowledge economy.

 The national cultural institutions have been leaders in recognising the future in this changing economic climate by clever branding and promotion of their online presence. All have demonstrated innovation and world-leading initiatives in digitising and presenting their collections, providing scholarly insights into those collections, and in making their precious heritage accessible to all Australians.

The potential for growth in the knowledge economy was detailed in an early report from 2003 by the then Department of Communications, Information Technology and the Arts. The report, Economic benefits from cultural assets, was one phase of the three-part Creative Industries Cluster Study, and it outlined the significant economic potential the vast collections of cultural institutions offered for development of high quality digital content. It also highlighted the barriers to this potential being unlocked, including the ongoing need for large-scale digitisation of collections. We recommend that the review panel takes account of these recommendations when considering the future of the national cultural institutions and their ability to meet these expectations.

 2. Experimenting with new forms of public engagement and audience participation:

It is essential that the cultural institutions do their job as well as possible with whatever resources they have, and that their job is seen as a broad one, relevant to the widest possible range of Australians. A pertinent example is the work being undertaken by organisations such as the National Library of Australia, in partnership with Aboriginal and Torres Strait Islander languages organisations, to identify languages material amongst their records. It is likely that they will keep on doing what they do as best they can. At some point though, we will start to see the long-term effects of ongoing funding cuts on important programs such as this.

Soft diplomacy: In the increasingly interconnected international environment, the role of the major cultural institutions in soft diplomacy – recognised so clearly by Asian governments like China, with their grasp of the long term role of cultural bodies – has expanded, not diminished.

 As in so many other areas, such as Australia’s support for intangible cultural heritage both here and in the Pacific and Asian regions, the major cultural institutions pick up the slack and carry the torch for Australia, often in the absence of others in this space occupied by the government.

3. Conducting outreach outside Canberra:

Outreach and presence in the ACT: It is a given that the national cultural institutions’ focus is a national one, but one of our concerns is that this includes a role in engaging with Canberra – the ACT is just one of many states and territories that needs to be equitably engaged with.

Because of the physical location of most of these institutions, there are opportunities for them to leverage off the local arts and cultural environment that can both benefit Canberra but also enhance the effectiveness of the institutions nationally. For example, visitors to large blockbuster exhibitions are much more able to augment their visitor experience when a wide-ranging, dynamic cultural milieu exists locally, so their visit is a richer and more stimulating one. This increases the likelihood of longer and repeat visits to Canberra, which is both the national capital and also an important regional and local centre, stretching well into western and southern NSW.

It is a symbiotic relationship, because in some ways the institutions provide enhanced services to the ACT simply by being here, but the local community in turn provides a base of support and patronage – a critical mass – that enhances the national role of these institutions.

4 & 5. Cultivating private sector support and developing other income streams:

The compounding effect of continuous budget cuts:  In Budgets over many years there have been a suite of cuts which, combined and continued over a sustained period, are having a compounding effect far more damaging than first appears. These include cuts to government agencies, practised also by previous governments, such as ‘efficiency dividends’ and a pause to indexation of program funding, freezing funding so it no longer increases to reflect inflation.

These cuts, having an impact that has been steadily ramping uphave been exacerbated by the outcomes in Mid-Year Economic and Fiscal Outlooks. To put this in perspective, institutions had been struggling with the base rate 1% annual ‘efficiency dividend’ but various ‘temporary’ increases at different times have just exacerbated and magnified the problem.

The reality of what might look like small percentage increases is that they are cumulative, like a reverse form of compound interest. Each percentage cut is a percentage cut on a cut, which is a cut on every cut before it. If individuals tried this exercise with their savings they would quickly see how rapidly they evaporate.

The whole notion of an ‘efficiency dividend’ for these bodies is highly questionable. As noted above, cultural institutions inevitably find their responsibilities, their collections and their programs growing as they expand their outreach and consolidate their roles. They rely on finding their efficiency savings to fund these expanded roles, not to siphon them back to consolidated revenue.

It is clear that the national cultural institutions have not been responsible for the blowout of the budget – they are collateral damage. They’ve been living within their means, even though these means have been cut back again and again under governments of both major parties. It appears from the wording of the Terms of Reference that there is an expectation by the government that none of these cuts will ever be reversed, even when the budget is back in surplus. If this is so, this damage will be permanent and ongoing, leaving the national cultural institutions without the means to meet any of the expectations outlined in the Terms of Reference.

6. Ensuring the appropriateness of governance structures

Lack of strategic policy framework: When there is no clear cultural policy framework or set of strategic principles guiding budget cuts to these institutions, we see continual cutting with no clear rationale. Flexibility is an excellent thing. The problem is that ad hoc policy on the run is no substitute for carefully thought through changes, so that even genuine attempts to find savings or increase efficiencies don’t really ever succeed.

This is part of the problem identified in November 2015 by former Treasury heads, Ken Henry and Martin Parkinson. In their view, decades of Government outsourcing and waves of redundancies have left much of the nation’s public service unable to provide proper and effective advice to politicians and voters, with growing doubts about the ability of government to solve national problems. In a damning assessment of the state of the public service after years of political turmoil in Canberra they warned that the abilities of the bureaucracy have been dangerously degraded. As Ken Henry commented, ‘I seriously doubt there is any serious policy development going on in most government departments’.

In this context, the national cultural institutions have managed well, and have put in place stringent and appropriate governance structures, evidenced by their leadership roles in innovative outreach programs, digitisation of collections and scholarly research. However, while low funding levels and ‘efficiency dividends’ continue to threaten their stability and their ability to live up to the expectations of governments and the public, governments risk undermining our country’s most precious cultural heritage, a cultural heritage that belongs to all of us, not just to governments.

Undervaluing role of government and public service:

We have a climate in which one of our greatest national resources – the public service, and in particular the national cultural institutions – are increasingly undervalued, and in which public servants are not encouraged to think strategically or in policy terms. This is particularly the case when there are influential views within Government strongly opposed to any significant role for government in many areas. This results in a decline in any kind of rational, systematic support for our national cultural institutions, particularly in a time of cost-cutting. The practical implications are that serious mistakes are made by government – and they are unlikely to be able to be undone.

The long-term impact of these cumulative mistakes will be major and unexpected, magnifying over time as each small change reinforces the others. In three years, six years, nine years, Australians will ask where valued and important programs have gone and how critical institutions have managed to diminish to the point where return will not be possible. The risk is that this will lead to irreversible damage to the contemporary culture and cultural heritage of the nation at a crucial crossroads in its history.

We know that the issues identified in the Terms of Reference are important priorities for the national cultural institutions, but it is unfortunate that they are having to function by compensating for reduced resources, when adequate resourcing would so dramatically achieve magnified reach and impact. Moreover, for these important areas of activity to be continued, let alone expanded, they will need significant resourcing in their own right.
Stephen Cassidy, on behalf of the Childers Group

 

*The Childers Group is an independent arts forum established in 2011. Our advocacy is based on the principles of:

  • independence;
  • objectivity;
  • valuing the arts;
  • pride in Australia’s national capital city and the surrounding region.
  • Emphasising the importance of research and evaluation in demonstrating the broad value of the arts.

 

We work closely with other arts and culture organisations around Australia to make the case for the value of arts and culture.