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Environment, Recreation, Communications and the Arts References Committee
Program 1—Arts and heritage
Subprogram 1.6—National Gallery of Australia

Senator LUNDY —What have been the attendances at the two major exhibitions held at the gallery since you took up the position—that is, Rembrandt and New Worlds from Old ?

Dr Kennedy —The attendances at Rembrandt , when held in Canberra, were 143,000 people or an average of 2,400 a day, which puts us in the top 20 internationally for the year. The second exhibition, Esso Presents New Worlds from Old , achieved 63,000 visitors at an average of just under 900 a day.

Senator LUNDY —How do these figures relate to your anticipated attendances for the exhibitions?

Dr KennedyRembrandt was significantly ahead of our expectations and New Worlds from Old was a good bit under our expectation. That was disappointing, but it was the only disappointment about that exhibition. It was critically acclaimed. It is now in Melbourne. We did terribly well with the catalogue. We had a very good seminar. It will travel to America. It achieved the creme de la creme in the art newspaper internationally, and we were delighted with that, but for a number of reasons, which we have analysed, it did not translate to the strong numbers that we would have expected. But it is still a very healthy number of people.

Senator LUNDY —Yes, it is. Can you give me an idea of what sort of numbers you were expecting?

Dr Kennedy —I can. We thought we might achieve about 1,200 a day.

Senator LUNDY —What is the impact of these lower than expected attendances on the budget for that exhibition?

Dr Kennedy —We have had three exhibitions, two of which have been heavily promoted. The first was the Wagilag Sisters Show , which was an extraordinary exhibition. It and New Worlds from Old have cost a lot of money, but that is retained within the separate exhibitions funds which have been generated over the years. Rembrandt did better than anticipated—and what was anticipated was high enough—so against budget the impact has been considerable but, as a loss, it is about $150,000.

Senator LUNDY —As a net loss for those three?

Dr Kennedy —In other words, we would have anticipated them making a profit and that profit—whatever that might have been—combined with the loss of $150,000 is the impact on
the balance sheet. We have been able to contain that. We are still in the black, but it does not help.

Senator LUNDY —How do you contain that sort of loss within your budget?

Dr Kennedy —With the benefit of the reserves built up over time and the previous exhibitions held at the gallery, in particular the previous two major exhibitions—Paris in early 1997 and Turner which was phenomenally successful before that—generated funds which have been able to contain this sort of exhibition program. However, it is not something that could be sustained over the longer term, and it has meant that we have subjected the exhibition program to review.

Senator LUNDY —As a result of these losses?

Dr Kennedy —Not only that—we are well capable of supporting our exhibitions—but also in the context of the overall review of the gallery and the type of program that we would put into place. It was inevitable that this would happen with a new direction. But also the inherited scheduling of exhibitions was only about six months.

My predecessor had very admirably provided what is a very ample program and a norm of a two-year plan, but, due to the longer than anticipated time, I suppose, in appointing a new director, 18 months of that program were used up, and it did very successfully. That offers us an opportunity also to develop a different sort of program, which would have been in one sense a drawback if you were committed to a program that you had not actually devised. However, it also presents a challenge to come up with things in a hurry to satisfy what is already an enthusiastic audience from the past.

Senator LUNDY —So, in terms of that program, what point are you at in terms of that model of a two-year program? Are you outside the auspices of that time frame now and into the new period in terms of programming?

Dr Kennedy —The present exhibitions are the kick-off of a new period, I suppose. We are nearing the end of a period of serious review of the exhibition program and the building of a new series of exhibitions. We launch that in September, and we are already pretty well scheduled from next May on. The roll-in factor, if you like, starts happening about 18 months or so after I was appointed. Therefore, the gap is actually between now and then. We have a number of ideas in hand but have yet to make a final decision, which will occur by the end of this month.

Senator LUNDY —Going back to your earlier point about the reserves you were able to draw upon, can I take it from your statements that the respective profits or losses are contained within an identifiable budget item within the National Gallery's financial structures?

Dr Kennedy —Yes, which is a non-voted item. Our budget for exhibitions is contained outside of government appropriation and sustains itself, therefore.

Senator LUNDY —Before your appointment, Dr Kennedy, there was an example where foundation funding was used to supplement the construction of the new wing at the gallery. I am just trying to ascertain whether sourcing funding of that nature has been used to supplement the exhibition funding.

Dr Kennedy —No, there has been no need to supplement the exhibition funding.

Senator LUNDY —Or to cover the losses.

Dr Kennedy —No, absolutely not. The foundation exists, as you know, to support the gallery, and the instance that you mentioned occurred to the great benefit of the gallery, that
the foundation had been able to support the building of the new wing. That has been, I think, a considerable success.

Senator LUNDY —Has that been repaid to the foundation?

Dr Kennedy —No, it actually has not been drawn from the foundation yet, but it will be within this year. It was not my understanding that the intention was to repay it. The intention of the foundation was part of the gallery and it was going to help the gallery to build an extension.

Senator LUNDY —It might be worth while having a look at the Hansard to see what previous evidence was taken on that. That is not my recollection.

Dr Kennedy —Maybe my views are different in the matter. I would be happy to discuss that further with the foundation, but that is my understanding.

Senator LUNDY —I would like to follow up now on some matters from the last estimates hearing in November. You said that you are going to establish quite quickly a rationalised approach to the development of the National Gallery's collection. Have you completed that process? If so, what approach have you decided on?

Dr Kennedy —I think that the basis of my contribution to the last Senate estimates was to outline a policy based on recognising that the National Gallery belongs to the people of Australia and not all of them live in Canberra, and that there is a very considerable proportion of the National Gallery's collection which is in storage and we have an accountability to the objects. I took a twofold approach to that. One was to stop buying while we reviewed the matter, and we kept that policy in operation for about eight months. It has been gradually lifted now.

Senator LUNDY —So have you bought anything in the last six months?

Dr Kennedy —Within the last two months, yes. We hope to be active in the market, though it is difficult to consider that internationally just at the moment.

Senator LUNDY —I cannot imagine why.

Dr Kennedy —As regards your question about the development of the policy, we have been working hard to elaborate a policy which will be consistent. It will not be revolutionary. In fact, it will seem quite simple, but the implementation of it will be difficult. That takes the notion that we will provide, where we can, works of art to venues which are suitable and which give access to the public. We have had a lot of discussion with institutions and organisations throughout Australia, and we hope to launch that policy as a coherent policy with a series of actions which will take place in the following year.

Already we have started that program by having a number of exhibitions which we generated ourselves travel. There was huge interest in the Picasso: The Vollard Suite exhibition when it was in Canberra, and that exhibition will now travel to three venues: to Heide, into Brisbane and then to Sydney. This is a welcome renewal of exhibitions programming with our colleague gallery in Sydney. We are then developing other exhibitions. The Ansel Adams exhibition, which has been on at the same time as New Worlds from Old , will also travel in the same way. This is on top of the already established travelling exhibitions program. In addition, we will be sending particular works to venues in the country when we are not actually using them.

Senator LUNDY —On that, has the gallery ever embarked on some sort of loan scheme or something like that before, or is this something completely new?

Dr Kennedy —No, I think there have been instances of it, but this is the coordination of it in a policy term. The day that we all had etched on our foreheads was 6 March, when we opened the new wing. It caused us all to work pretty well together, I think. Part of that was the development of a loan policy and a series of plans. Instead of saying, `You can't have it because we cannot give it to you for a year,' or introducing policies which would make it more difficult for people to borrow from us, we now have a friendly policy. For example, we have reduced the numbers of pieces of paper from six to two, and generally we have a policy of wanting to give unless we cannot, as opposed to the opposite.

Senator LUNDY —What works have been purchased in the last two months, and what did they cost?

Dr Kennedy —We were very pleased to be able to purchase 10 major Aboriginal barks from Yirrkala in the Northern Territory. They are three metres high. You may have seen some of them in the national indigenous art awards at Old Parliament House. They were, I think, a significant selection from a larger body selected by our Aboriginal art curators and a major edition to the national collections, and they cost approximately $10,000 each.

Senator LUNDY —How many of them did you get?

Dr Kennedy —Ten.

Senator LUNDY —Is that all?

Dr Kennedy —We had two other items, both prints from the department of international prints, drawings and illustrated books. One was by David Hockney, which is a superb laser print. He concocts theatrical settings in the studio and then photographs them and uses a photocopier technique to produce the most extraordinary images. There were two of these. There were also two works by Richard Serra, who is a major minimalist sculptor who has also worked in print media. These are about two metres square, and they look like the most incredible black concrete. You cannot imagine that they are paper. They are etched in acid over a period of 24 hours, and to get 24 hours in an acid bath actually takes a week because you take them out every 20 minutes. Anyway, they are phenomenal things.

The Aboriginal art barks are major works. The David Hockneys and the Richard Serras, I think, are serious contributions. They are modest, however, in price. It cost $5,850 for the Hockneys and $4,500 for the Serras. That is each—so two at $5,850 and two at $4,500. We have been actively looking for major works, and we were disappointed recently not to achieve the work that we looked for in New York. There will be major purchases and they will cost a lot of money. If we are going to purchase premium art objects, we have to be prepared to pay what will probably be—because the experience in the past has been different—the highest prices that have been paid for art works in this country.

Senator LUNDY —We will watch with interest. How do these acquisitions fit within your new acquisition policy?

Dr Kennedy —In the case of the barks, the Aboriginal art collection in the National Gallery of Australia has been built up assiduously since the gallery's foundation. It strives to be representative of the various areas of art making by Aboriginal people. We are absolutely confident that we will be using these works actively over the future of the gallery. As regards the works on paper, they have environmental limitations to their continued exhibition. But they are major works by very major artists—in fact, very senior international contemporary artists. As I say, I am very happy to have them too.

Senator LUNDY —What do you estimate you will expend on acquiring works of art for the financial year 1997[hyphen]98? You have outlined essentially 12 or 13 items. Are you going to be purchasing any more before the end of this current financial year?

Dr Kennedy —It is possible but I think unlikely that we will have finished negotiations on works of art by the end of the year, and certainly on major objects, unless we purchase at auction. It would be difficult to do that internationally at the moment with the fluctuation in currency. Forgive me, Senator, I cannot answer your question. In the nature of art buying, when you are looking for premium art objects, you buy when they become available, and you may accumulate many millions of dollars before you decide to buy one—and indeed you may have to.

Senator LUNDY —When you do not spend money on acquisitions in a given financial year—for example, you obviously have not had a consistent acquisition program over the last financial year—what happens to that money at the end of the financial year? Is it rolled over? What is the way that the gallery and the department provide those funds?

Dr Kennedy —The gallery's appropriation from the federal government is $4 million a year for the purchase of works of art and where that is not expended it is rolled over. It is one of those things where we have to ask indulgence—

Senator LUNDY —So you have been saving up?

Dr Kennedy —Yes, we have been saving up. And we would still only be able to buy one[hyphen]quarter of a Picasso—but I am not saying we are after the whole of a Picasso! We have to be judicious. The federal government's funding is very important, and I think it is significant funding still by international standards. Of course we would like more, but it is significant. We supplement that with private funding which has been made available to the gallery by donors. There have been only a few but a very important few. We anticipate that that will increase, and I hope to be able to announce something important in that regard in the next month or two.

Senator LUNDY —We will watch with interest. Did you report to the gallery council meeting on 26 February on the building refurbishment and access initiatives? What were the building refurbishment initiatives you referred to in that report?

Dr Kennedy —I am sorry; I had difficulty hearing the first part of the question.

Senator LUNDY —I am querying whether or not you reported to the council meeting on 26 February in relation to building refurbishment and access initiatives and, if so, what were those initiatives?

Dr Kennedy —We have those minutes here, Senator. If I recall correctly, what it reported to the council on at that time was a series of initiatives which we had launched in October last year which saw the formation of four teams of staff members within the gallery, and their work was to reach fruition on 6 March. That encompassed on the one hand very considerable numbers of staff and all the curators working on cataloguing the collection and rehanging the entire gallery. That resulted in one[hyphen]third more works being out on display on 6 March than had previously been on display. It was an entire rehang of the collection and reordering of it along its four constituent parts: Aboriginal, non[hyphen]indigenous Australian, international and Asian.

The second team dealt with publication, signage, logos, the reorganisation of the foyer space, a new cloak room, brochures and all those sorts of issues. The third dealt with a revised series of loan procedures—I have referred to that. The fourth established electronic access as an
important part of the gallery program in that within the previous six months we had achieved the placing of the entire 109,000 objects in the collection on the Internet in text form where they could be accessed by anybody who has access to a PC anywhere in the world. That had been a major problem for us in that we had not been able to access the collection; we had accessed wonderful collection catalogues as seen in exhibitions.

So those four issues were all delivered. The Prime Minister pressed the button on the touch screen PC on 6 March and the building was presented to the public in a new way. Fortunately for us all, that was very well received.

Senator LUNDY —Can you provide information as to how much each of those four initiatives cost?

Dr Kennedy —In precise figures, I would have to take that on notice. It was approximately $1 million.

Senator LUNDY —Also, could you itemise the expenditure on each of those initiatives and provide that to the committee, including any expenditure on building refurbishment and access changes, although I presume they are contained within the four initiatives you have described. Did you report to council with respect to capital expenditure for reasons, say, of either deferring it or changing it?

Dr Kennedy —Could you elaborate on that?

Senator LUNDY —Did you report to council with respect to deferring capital expenditure?

Dr Kennedy —The entirety of the changes which were put in place on 6 March were contained within the gallery's budget. To do that we reorganised our priorities and achieved some savings during the year in terms of energy costs and the like. Also, we deferred a number of proposed system changes within the gallery which will be taken on board within the present budgetary discussions which are happening at the gallery now.

Senator LUNDY —What do you mean by that?

Dr Kennedy —I mean that I took the judgment that it was more urgent to do the things we actually did than to do some of the things that had been scheduled to do.

Senator LUNDY —So you did defer some capital expenditure items?

Dr Kennedy —Yes. Specifically, there had been proposals to revise the management system within the gallery. It was not something that could not wait for a period of time. Secondly, there was a proposal to introduce a more elaborate ticketing system than we actually have. They added up to a very considerable amount of money and that amount of money in considerable part helped to pay for all the changes.

Senator LUNDY —Can you itemise any other expenditure that was deferred?

Dr Kennedy —As I said, if I can take that on notice, I will be able to give you further information. Straight off now I cannot recall any further—

Senator LUNDY —Yes. If you could provide that information to the committee, that would be great. Last time you were before the estimates committee you mentioned that you believe development had not been coordinated at the gallery and you were giving priority to developing sources of funding such as sponsorship donations, endowment and bequests, et cetera. How is that going?

Dr Kennedy —It is going pretty well. By our 16th birthday, my intention is that we will have another six months of work put into place which will revise our structures of funding and staff. Regarding funding, we hope to establish those areas of our expenditure which we
would anticipate that the government on behalf of the people would continue to pay for and those that we would like to develop which private funding could support, whether corporately or through our foundation and private benefaction. To do that, we have had to look very carefully, with the council, at reviewing the foundation and its specific purpose and the efficacy of its present capacity to deliver, and we have done that. That has been going well. I have recently been in America with the American Friends of the Australian National Gallery—AFANG—and we have been doing the same thing. I anticipate that we will soon be able to plan forward vigorously.

The first two new posts—and the only two new posts that have been established since I joined the gallery—which were advertised recently are head of development and head of marketing. I did flag those two senior posts when I was here last. They are to cover a range of activities which I believe the gallery should do that are not presently covered by staff. The interviews for those posts will take place within the next month. The arrival of somebody specifically responsible for development in the senior management team will be a significant support to us. Added to the fusion of the foundation with the existing membership—which is 30,000 members all told—that will provide a very strong foundation vehicle for the gallery into the future.

Senator LUNDY —Are those two new positions going to add two more managerial positions to your general managerial staff or have you restructured other managerial positions to allow for them within your budget and your proportion of management to everyone else?

Dr Kennedy —As I referred to at the last meeting, we had contracted the overall executive staff in the gallery from four to three. That position has not been filled. It was previously called `Assistant Director for Corporate Services', and that had been handled differently in the new structure. Our Assistant Director Collections has recently been made inaugural director of the National Portrait Gallery, so you are looking at the executive staff—Alan Froud and me. We will be looking to the curatorial area, because this is fundamentally what we are about. In addition we will be introducing two new jobs, but I did not say that they would necessarily be at executive positions. So it will be a question of horses for courses.

Senator LUNDY —So you will apply your discretion to the status of those positions, depending on applicants, or do you have a pre[hyphen]existing structure that the applicants will fit into?

Dr Kennedy —It will be pre[hyphen]determined as to what we want them to do. But, as we have advertised, the salary packages are negotiable—and they will be contractual. They are very important positions.

Senator LUNDY —I am not providing any subjective view on the status or importance of those positions; I am just trying to ascertain the process by which the applicants will be employed and allocated an appropriate level of remuneration.

CHAIR —Senator Lundy, how are we going? We still have the National Library and the National Museum.

Senator LUNDY —Slowly. But in the interests of facilitating the progress of the committee I can place my questions for the National Library on notice.

CHAIR —That would be of great assistance. Officers from the National Library can leave. Thank you for coming.

Senator LUNDY —I am sorry for any inconvenience to those officials. It is purely a time contingency matter.

Senator LUNDY —I have seen references in the press to an audit by Coopers and Lybrand of the extension project and, at the last estimates hearing, you mentioned a review of the project that you had commissioned. Are the audit and the review you commissioned the same thing? Were you alluding to the audit report, or have you conducted your own review of the project?

Dr Kennedy —I am sure it is the same thing. We have had only one review. That was a very precise one at a particular moment in time during the construction of the extension to determine whether we needed to take any remedial action at that time to make sure that the extension opened on 6 March.

Senator LUNDY —Can you provide a copy of that report to the committee?

Dr Kennedy —Yes, we will send that to you.

Senator LUNDY —Thank you. Did the council consider the issue of financing of the extension at its meeting on 26 February?

Dr Kennedy —The council did discuss, naturally enough, the progress of the project as it came towards 6 March. That was only 10 days away at that time. At that stage, of course, the building was nearly complete. In fact, they were walking around it on that day, and they were delighted. I was very pleased that my chairman kept winking at me and that he was very happy.

Senator LUNDY —That is good to hear. Was the full cost of the project reported to the council at that meeting? And what was it?

Dr Kennedy —In as much as it could be at that time. All the costs we were aware of at that time were of course reported at that time.

Senator LUNDY —What were the costs?

Dr Kennedy —The original anticipated cost was $9.2 million.

Senator LUNDY —Were there any additional costs associated with ensuring that it was finished by the 6th?

Dr Kennedy —Yes, I had said to you at the last meeting with you that they would be marginal. I am pleased to report that they were. There was a 3.2 per cent increase, and the total cost of the building was just over $9.5 million. The way that has been provided for is: $4.8 million from the federal government; $2 million from the ACT government—from that total sum of money, $400,000 was generated as interest; and $2.3 million came from the gallery. That added up to $9.5 million. Of the gallery contribution, half a million dollars came from the foundation earlier referred to, and $1.8 million came from the gallery reserves. We still have our head above water but, as I say, we are in a tight squeeze.

Senator LUNDY —Those additional costs—was that $0.3 million the increase from $9.2 to $9.5 million? To what degree of specificity was the council advised of those additional costs and what they comprised?

Dr Kennedy —I think it is fair to say as a council member that the council was fully assured that the project was being well handled and that all the figures were being provided to them. The major cost was actually the display wall cost. That was $177,000 worth. There had been acceleration costs involved in the overall project which had been agreed at the time of the review you referred to. But that was contained within the $9.2 million. The display costs could
be handled as an exhibition cost or could be handled as provision in the first instance. It is not very helpful to provide the building with just two huge rooms. Of course, display walls were always considered. So the total cost is just over $9[half ] million.

Senator LUNDY —With the additional $0.3 million you mentioned, $177,000 was for a display wall. What was the other $123,000 for?

Dr Kennedy —There was an additional cost for acceleration of the project.

Senator LUNDY —That was the $123,000?

Dr Kennedy —Yes, and a few things like chairs and cabling. There was a security wall underneath the building that we needed to build because it had not actually been provided for. It would have given access from the fern garden under the new building which was just the undercroft. And this was one of the best things about the new wing: it is actually empty and awaiting a good idea, of which the gallery has plenty, I am sure.

Senator LUNDY —The introduction of those elements into the construction budget seems to be a bit unusual. Were those items contained within the original specification of the extension?

Dr Kennedy —In terms of the display walls, and faced with the deadline of 6 March and the agreement of the Prime Minister to open it on that date, it was considered very wise—and certainly cost effective—to employ the existing contractors to actually provide the display walls. That is what happened. So, if you like, given that it was provided from the gallery funds, we were just asking them to make sure that it was done—which they did, very effectively.

Senator LUNDY —And the council knew of that expenditure going in those areas—they were advised of that?

Dr Kennedy —Yes, absolutely.

Senator LUNDY —Have you bid for any additional Commonwealth funding for the project?

Dr Kennedy —No. I beg your pardon. If the question is `Have I asked?' the answer is no. If the question is, `Has the gallery asked in the past?', the answer is yes.

Senator LUNDY —Please take my use of the personal as the gallery.

Dr Kennedy —Excuse me. Before my time, an application was made for additional funding of $2 million. However, there had been an intention that private support would be found for the new building and it was not found. In that context, I have agreed that we would not proceed with that. We understand that it is not forthcoming anyway, but that is the understanding that I have.

Senator LUNDY —So you have withdrawn that application?

Dr Kennedy —Well, it may be still active—but it is moving very slowly.

Senator LUNDY —Okay. Could you provide the committee with the information as to the current status of that, if it is still being actively considered.

Dr Kennedy —It is over. We have a new building which we have paid for and we are not in debt.

Senator LUNDY —But the foundation is not going to get their money back?

Dr Kennedy —The foundation is not making money to keep the money. It is making the money to give us the money so we can make the building and provide the gallery.

Senator LUNDY —Let me refer you to previous Hansards about that issue because, as I said, my recollection is that it was the intent of the gallery to resupplement the coffers of the foundation with respect to that loan.

Dr Kennedy —Could I ask the deputy director just to comment further on that?

Senator LUNDY —Yes, please.

Mr Froud —I think I have a recollection that at the time we were making some comment to the committee, we were feeling quite optimistic about the possibility of raising funds from the private sector by the sale of naming rights to elements of, or the whole of, the extension. It was in that context that the gallery provided an underwriting—one element of which was from the foundation. It was assumed that we would have been successful in our bid to have private sector funding secured for the extension and that we would have returned the underwriting, or any call on any funds from the foundation would be returned. But our efforts to secure funding from the private sector have not been successful, so the situation has changed.

Senator LUNDY —Yes, I was aware of that background. I am just not sure what the foundation thinks of it. Can I put a series of questions on notice with respect to other audits? First of all, have there been any other special audits carried out over the last nine months?

CHAIR —Is this on notice?

Senator LUNDY —No, sorry—this is a question.

Dr Kennedy —We have an ongoing internal audit situation which occurs every couple of months.

Senator LUNDY —Is that run by a committee?

Dr Kennedy —An accountancy firm has been hired in to do that; and we have also had a review of our fundraising capacity and activities conducted which has been very helpful to the foundation in its restructure. I think that is it, but if there are any others, perhaps I can come back to you.

Senator LUNDY —Does the gallery have an audit committee for your internal audit plans?

Mr Froud —The whole council constitutes the audit committee. That is the wish of the current chair.

Senator LUNDY —Can you provide the committee with your internal audit plan and any information of that nature?

Mr Froud —This committee? Yes.

Senator LUNDY —Probably the best thing for me to do at this point is to put the rest on notice so I can have 15 minutes with the National Museum. Thank you very much for your time this evening, Dr Kennedy.

Senator SCHACHT —I was invited to see the gallery's exhibition of late 19th century American[hyphen]Australian—

Senator LUNDY —`New worlds from old.'

Senator SCHACHT —Thank you, Senator Lundy. Was that as successful—

Senator LUNDY —We covered all of that.

Senator SCHACHT —Did you? Okay. Whenever you want to provide Bushy Park to a member of parliament in Canberra to hang on his wall for a while, as I grew up near that area I would be more than happy to hang it on my wall for a long time.

Dr Kennedy —We are very pleased you enjoyed the show.

CHAIR —Thank you very much, Dr Kennedy and Mr Froud.

[7.01 p.m.]