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Environment and Communications Legislation Committee
Australia Council for the Arts

Australia Council for the Arts


Evidence from Mr Blackwell and Mr Grybowski was taken via teleconference—

CHAIR: We will start this morning's proceedings with a videoconference with officers from the Australia Council. Mr Grybowski, welcome, and would you like make an opening statement?

Mr Grybowski : Good morning, Chair and Senators. Firstly, can I acknowledge and thank you for allowing us to appear by videoconference this morning. We have our board meeting today, so we very much appreciate being able to attend by video.

CHAIR: And thank you very much for accommodating us as well. Would you like to make an opening statement?

Mr Grybowski : I do not want to make an opening statement, no.

Senator BILYK: Thank you, gentlemen, for appearing today. I want to start—I am sure this will not come as a surprise to anyone—with the Aus Council and the funding issues. Can I get a year-by-year breakdown of funding to the Australia Council from July 2015 to June 2021. I know that the announcement that the minister made last week was for the next four years, but I am interested in seeing the overall impact over the six-year period.

Mr Grybowski : Yes, certainly. Thank you for the question. The revenue from the government in the 2015-16 year was at $192.562 million; in 2016-17, it was $196.424 million; in 2017-18, it is predicted to be $209 million; in 2018-19, it is estimated to be $209 million; in 2019-20, it is estimated to be $213 million; and in 2020 $216 million.

Senator BILYK: Are you able to tell me how much uncommitted funding in total over each of the next four years—so from 2017-18, year by year—is being restored and made available to the Aus Council following the minister's announcement?

Mr Grybowski : If I can clarify the question, you are asking the amount of uncommitted funds?

Senator BILYK: That is right—uncommitted funding, in total, over each of the four years from 2017-18, year by year.

CHAIR: Could I just ask a question of clarification. Is that an issue that would be determined in the budget?

Senator BILYK: No, it has already been determined.

Mr Grybowski : The minister announced $80.2 million to the Australia Council over four years, comprising $19.2 million of committed funds. That will be transferred to the Australia Council, and $12 million of that is in Catalyst funding agreements going to the arts sector, and $7.2 million for the major festivals initiative and the World Orchestra—

Senator BILYK: Mr Grybowski, sorry to interrupt, but you are dropping in and out. It is a little bit difficult for me to hear you.

Mr Grybowski : I was explaining the committed funds. Your question was about the uncommitted funds over the next four years. There is $61 million in uncommitted funds over the four years. That includes, as the minister announced, $32 million which he had previously announced, but we were pleased to have it confirmed in —

Senator BILYK: Sorry, Mr Grybowski. I am really having difficulty. It is not you; it is the link, I am sure.

CHAIR: It is the link. I think we are all having trouble. Perhaps the secretary might be able to give us the figures.

Senator BILYK: Yes, if somebody at the table can answer—

Dr Smith : We can certainly provide those figures.

CHAIR: Thank you.

Senator BILYK: It may be easier for hearing purposes if somebody at the table can do it.

Senator Fifield: I think Mr Grybowski said that the uncommitted funding was $61 million over four years, which included $32 million that I had previously announced being returned to the Australia Council, which he said he was happy to have confirmed.

Senator BILYK: You are confirming that, Minister?

Senator Fifield: Yes.

Senator BILYK: So that is the total, but can you tell me the figures over each of the four years? I am after not just the total but the figure over each of the four years from 2017-18, year by year. I am not sure if someone at the table is able to answer that.

Dr Smith : We can answer that.

Mr Eccles : Yes, we can give you the figures. You are after the uncommitted funds in 2017-18, 2018-19, 2019-20 and 2020-21?

Senator BILYK: That is correct.

Mr Eccles : In general terms, uncommitted in 2017-18—

Senator Fifield: Is that the $32 million or the $61 million?

Mr Eccles : The $61 million. The figure for 2017-18 is $11.5 million. Then in 2018-19 it is $14.4 million, in 1919-20 it is $16.7 million and in 2020-21 it is $18.7 million.

Senator BILYK: Thank you. How much of this uncommitted funding will be applied to or is projected to be applied to the final rounds of the Catalyst slush fund?

CHAIR: Senator Bilyk, I do not think that language is called for.

Senator BILYK: Sorry. Everybody knew it was a slush fund, anyway. But that is all right. I will take back 'slush fund'.

CHAIR: Senator Bilyk, I think it will go easier—

Senator BILYK: Of the Catalyst fund.

CHAIR: Thank you, Senator Bilyk.

Senator Fifield: For the record, can I just indicate that, as minister, I have accepted in each round the recommendations of the panels of assessors. I have not directed that funding.

CHAIR: Thank you for that clarification.

Senator BILYK: Can I just clarify. Senator Fifield, you did not actually give birth to Catalyst, so I am not actually implying that it is you.

Senator Fifield: I was just explaining how it operates.

CHAIR: Senator.

Senator BILYK: We have not got much time. Can I know how much of the uncommitted funding will be applied or is projected to be applied to the final round of Catalyst? Can someone at the table answer?

CHAIR: Given we are having trouble here, we just need to make it clear if you are asking the Australia Council's Mr Grybowski or the staff here.

Senator BILYK: I cannot hear Mr Grybowski at all, so it will have to be people at the table until the tech is fixed.

CHAIR: Before we do, Mr Grybowski, can you still hear us?

Mr Grybowski : I can. You are coming through very loud and clear. I have my volume on maximum. Can you hear me?

CHAIR: Yes, we can, just faintly. Senator Bilyk, if you could ask that question.

Senator BILYK: You know I have a hearing disability. It is too hard for me. Sorry.

CHAIR: What we will do, Mr Grybowski, is this. The questions will go straight to the department at this stage but if you could indicate—even if you just raise your hand—if you would like to add something to that, I think that might just make it easier.

Senator BILYK: Thanks, Chair.

Mr Eccles : Senator, what was the question?

Senator BILYK: How much of the uncommitted funding will be applied to or is projected to be applied to the final round of Catalyst?

Mr Eccles : The department would need to take that on notice. I am just looking to Mr Grybowski to see if he can help.

Mr Grybowski : Obviously the decisions about the final round of Catalyst will be made through the Catalyst assessment process. We will then work with the department—once those decisions are made—on the handover to us to manage those contracts.

Senator BILYK: When is that process going to take place, Mr Grybowski?

Mr Grybowski : We do not assess the Catalyst program. I will refer that to the department.

Senator BILYK: Okay. Mr Eccles?

Mr Eccles : They are under assessment now.

Senator BILYK: What is the likely timing for the process to be completed?

Dr Arnott : The usual timing is about six to 10 weeks for the assessment process and decision making.

Senator BILYK: Thank you. Are you able to tell me how much of the balance of the uncommitted funding will be available for expenditure on small to medium organisations?

Dr Arnott : As you are probably aware, Catalyst prioritises small to medium organisations. I think to date something like 80 per cent of the funding has gone to small to medium organisations.

Senator BILYK: That was not quite the question. The question was: are you able to tell me how much of the balance of that uncommitted funding will be available for expenditure for small to mediums?

Senator Fifield: Senator, do you mean the balance of the uncommitted funding that is going to the Australia Council?

Senator BILYK: Yes, that is going back to the Australia Council.

Senator Fifield: That is probably one best put to the Australia Council. They are no doubt assessing the opportunities that they now have as a result of the transfer of funds. But I will let Mr Grybowski answer.

Senator BILYK: Mr Grybowski, would you like to add to that?

Mr Grybowski : Certainly. Our open grants rounds are available to individual artists, groups of artists and small to medium companies. They are obviously assessed, and it is roughly a fifty-fifty division between individual artists and small to medium companies.

Senator BILYK: Fifty-fifty of what, though? How much of the balance? How much money? Of the uncommitted funding? Do we know? You cannot tell me.

Mr Grybowski : The total uncommitted funds will go into our grants program.

Senator BILYK: Are you able to tell me by what amount, year by year, these uncommitted funds represent an improvement in the current and projected available funding over the four years for the existing programs of the Australia Council?

Mr Grybowski : The balance over the four years that will be applied to our grants program will be in excess of approximately $25.6 million. Once the commitments in the Catalyst grants conclude, that amount will increase. We are currently working through the contracts at the moment to determine the specific figures year by year. In addition, the figures rely on the forward estimates being improved through the budget process.

Senator BILYK: Are you able to tell me the amount of the Australia Council's actual and projected spending on grant programs pre the creation of Catalyst and post Catalyst? That is, from the time the uncommitted funds were returned?

Mr Grybowski : What I can do is give you the total of the Australia Council programs, which is our grants program and our small to medium companies. In 2014-15, it was totalling $56.8 million; in 2015-16, it was $50.5 million; in 2016-17, it was $51 million; and in 2017-18—

Senator BILYK: Sorry, Mr Grybowski, 2016-17 was what—51?

Mr Grybowski : Yes, $51.5 million. Subject to budget approval, $54.5 million in 2017-18. There were, however, some discontinued programs—ArtStart, Artists in Residence, Creative Community Partnerships—of just over $11 million, which concluded in the 2015-16 year. In addition to that, the council applied $5 million per year from its reserves in the 2016-17 year and 2017-18 year. So you must understand that there are a number of budget lines, and it is important to understand each of those lines to see the whole of the impact.

Senator BILYK: I absolutely agree. That is why I am trying to get some clarity around them.

Mr Grybowski : If you did not hear those figures, I am happy to confirm those figures in writing.

Senator BILYK: That would be good. I did get them, but that would be good anyway for me for future references. Are you able to tell me what funding will be badged as Australia Council funding but be projects or programs that were approved by an entity other than the Australia Council under Catalyst or any other programs?

Mr Grybowski : Obviously in the administrative transfer of the Catalyst contracts we will work for a smooth transition. We will look at the most effective way of novating those contracts and reinstating them as Australia Council contracts. That work will take place over the coming weeks and months.

Senator BILYK: I actually asked about what funding will be badged as Australia Council funding but be for projects or programs that were approved by Catalyst or other programs.

Mr Grybowski : Are you looking for a figure?

Senator BILYK: Yes. A figure and a name.

Mr Grybowski : Once we have created new contracts, they will be Australia Council contracts.

Senator BILYK: I understand that. I am trying to find out what will be Australia Council contracts that have been already approved by Catalyst or other programs.

Mr Grybowski : It is $11.8 million.

Senator BILYK: Thank you. You mentioned before about some programs—I think it was in 2015-16—that were discontinued; I did not quite catch them. Are you able to tell me what programs and initiatives were discontinued or reduced to support grant programs with the changes that were taken through the loss of funding?

Mr Grybowski : Certainly. They were: the Artist-in-Residence in schools program; the ArtStart program; the Creative Community Partnership Initiative; and Creative Australia artist grants. There were four different programs.

Senator BILYK: Are you likely to look at restoring some of those?

Mr Grybowski : We assess all our programs and activities on a year-by-year basis once the budget is set and make sure that their direction goes to the most appropriate area. Our commitment is to our open grants program but, in the future, should additional funds become available, we would certainly review our capacity to restore one, or some, of those programs.

Senator BILYK: That is encouraging. On 1 November last year, I asked if media reports—I think it was question 47, but I am not sure—were correct that the minister was planning to return all or most of the funding to the Aus Council and I was given a very emphatic no. Minister, this is probably one for you: what has changed; and when was the decision made to restore this funding?

Senator Fifield: I am assuming that the answer that you have there was a statement at the time as to whether the government had made a decision to return further funds, which—

Senator BILYK: It was about whether you were planning to return funds.

Senator Fifield: That is right. Governments have either made decisions or they have not made decisions and, before they have made decisions, you cannot say that the government is planning to do something, because it is not the case until a decision has actually been made. So that was a statement just reflecting the policy at the time. I am sure—

Senator BILYK: So when was the decision made?

Senator Fifield: I will have to check on the precise date that the decision was taken. Officers at the table may be able to assist, but they are internal decision-making processes of government and there certainly would have been a date. We can take that on notice, if officers at the table cannot. So we are happy to do that.

CHAIR: Just further on that, Minister, can you let us know, with these changes, what consultation occurred prior to the decision being made?

Senator Fifield: Happy to, and this might also partly go to what is behind Senator Bilyk's question. When I became the minister, the government had already announced in the budget in 2015 that there would be created a new program called the National Program for Excellence in the Arts. That had not yet been established when I came into the portfolio. I said to the sector that I would have a look at that situation. As a result, I renamed the program Catalyst, refocused it and also returned $32 million over the forward estimates to the Australia Council.

At that time, I also said that I would continue to review the program. I am not someone who feels proprietorial about what ifs and, if something can be done better, I am very much open to that. I said that I would continue to examine the program. I did that. I spoke to many different parts of the sector, both formally and informally, and I reached the conclusion after the operation of Catalyst that it was appropriate to defer the rebalance and return the additional funds to the Australia Council.

CHAIR: Mr Grybowski, do you have any additional information for the committee on consultation?

Mr Grybowski : As the Australian government's funding and advisory body, we are in very regular communication and contact with the minister, the minister's office and his department. So throughout that period there were numerous conversations, obviously about funding and investment in the arts but more broadly about issues that we are observing across the sector.

Senator Fifield: Again, it is fair to say this is a sector that is very willing to give its views and that does not need encouragement to give its views. That is something that I have found very helpful as the minister.

CHAIR: So this was not a surprise to anybody.

Senator BILYK: I think it was a surprise to Senator Brandis, but I accept that it was not to Senator Fifield.

Senator Fifield: I should have mentioned that obviously I consulted very closely with the Australia Council and also with my department.

Senator BILYK: Thanks, Minister. Getting back to the issue about when the decision was made to restore the funding, you will take that on notice?

Senator Fifield: Certainly.

Senator BILYK: Can you also tell me in that answer, when I get it, whether the decision was made before or after the decision to impose the increased efficiency dividend and parameter change cuts on Aus Co?

Senator Fifield: I can answer that. I will ask Mr Eccles to add to this, but those efficiency arrangements were announced one or two budgets back. Mr Eccles will correct me.

Mr Eccles : That is right.

Senator Fifield: So my announcement post-dated that.

Senator BILYK: That is good.

Mr Eccles : The decisions around parameter adjustments are part of the standard budget process. The ones you are referring to were in the 2016-17 budget, so it would have been announced around about May 2016.

Senator BILYK: I have a couple more questions around staffing and the new announcements you made, Minister. Will Aus Co need more staff to administer the funds that have come back? If so, what is the cost of that likely to be? Linking to that, what happens to the departmental staff who administered Catalyst and will there be job losses?

Mr Grybowski : If I can answer from the Australia Council's perspective, we will not be increasing our staffing as a result of these changes. We will be able to absorb the additional work as part of our regular activities.

Senator BILYK: Dr Smith, did you want to add something there, or Mr Eccles?

Mr Eccles : There will be no job losses in the department. The department will just continue to work on implementing the arts agenda.

Senator BILYK: Minister, you talked about the consultations you have done with the industry, Aus Co and all that. You might need to take this on notice—I am happy for that. Was the return of the funding discussed with the Aus Co prior to the announcement? If so, can you tell me when it was discussed, with whom, and what advice was provided to you on the return of those funds?

Senator Fifield: Certainly, I am happy to take that on notice.

Senator BILYK: Thanks. Mr Grybowski, did you actually request the return of funding? If so, what amount, who suggested the amount to be returned and when? What advice was provided to the minister on the request for the return of this funding?

Mr Grybowski : As an agency of government, we work within the budget parameters set by the government of the day. But, as I said previously, in our very regular conversations with the department, the minister and his office we explain what we are seeing in the sector, the impact of the programs and issues around success rates and application rates. So it is more about the information and what we are seeing. But the budget for the Australia Council is set by the government of the day.

Senator BILYK: Was the Catalyst fund $12 million per year overspent at the time of the minister's announcement? And will it be overspent at the time of the transition to the new arrangements, including applications received by 18 March 2017? If so, by how much was Catalyst overspent?

Mr Eccles : Catalyst has not been overspent.

Senator BILYK: Not at all? And it won't be once the last round is sorted?

Mr Eccles : No.

Senator BILYK: So the new arrangements are transferring administration of a number of initiatives from the department—for example, the major festivals—to Aus Co. Will Aus Co receive extra funds to administer those additions?

Mr Grybowski : No.

Senator BILYK: You'll just suck it in?

Mr Grybowski : Correct. Our grants team is obviously expert in delivering programs and events for the arts, and we will be able to absorb those activities.

Senator BILYK: Are you able to talk to me about the Opera Review?

Mr Grybowski : I think that is a matter for the government. The response to that independent review is for the government. Our role would be to implement the response that the government will make.

Senator BILYK: The question is around the minister's statement. It referred to the returns of funds providing:

…scope for the Australia Council to address specific recommendations from the Opera Review related to Victorian Opera and Opera Queensland, as well as addressing funding sustainability for Queensland Ballet and the Brandenburg Orchestra.

Which recommendations from the Opera Review is the minister referring to in that statement?

Senator Fifield: There are two. One is in relation to the fact that the Victorian Opera meets the criteria to be a major. The other is Opera Queensland and a recommendation from the Opera Review that there be some short-term targeted support to assist that organisation to viability and on the basis that its governance arrangements are augmented.

Senator BILYK: How much will Aus Co provide from the uncommitted returned funds to address specific recommendations that the Opera Review related to each of the Victorian Opera and Opera Queensland, and what steps will be taken in relation to the funding sustainability for Queensland Ballet and the Brandenburg Orchestra?

Dr Arnott : The specific amounts that are being provided to those companies are still under discussion. The overall amount is about $3½ million over four years.

Senator BILYK: In the Australian on 18 March this year, they commented that the four organisations would receive increased funding from this transfer of funds from Aus Co. The Sydney Morning Herald reported on19 March that Victorian Opera would receive a $340,000 annual grant to assist in transition to a major performing arts company, and the Brandenburg Orchestra in New South Wales would receive an additional $250,000 per year. Is that correct?

Dr Arnott : Yes, that is correct. That is included in the $3.4 million over four years I mentioned earlier for the four companies.

Senator Fifield: In ballpark figures, putting to one side the fact that Opera Queensland will be short-term funding, it is about $900,000 per year that the other three organisations collectively will receive.

Senator BILYK: Are you able to tell me what process was followed for that additional funding and who agreed to make the additional payments?

Senator Fifield: As government, we recognise that the decision that we were taking to return funds to Aus Co would enable some of what I think are clear and justifiable decisions to be taken.

Senator BILYK: So the follow-on question is: will that funding be provided at the expense of organisations in the small to medium sector? The pie is only so big so, if we are splitting the pie, is that going to be at the expense of organisations in the small to medium area?

Senator Fifield: I think the way I would characterise it is: the decision to return this money to the Australia Council is not at the expense of any organisation; it is to the benefit of Aus Co.

Senator BILYK: I am talking about the specific four organisations I mentioned, Minister.

Senator Fifield: The decision that has been taken to return this money to the Australia Council is not at anyone's expense. What it does is give the Australia Council more opportunities to do more things than it currently has.

Senator BILYK: I think everybody in the arts community is grateful for that, Minister, but, at the end of the day, the pie is only so big no matter which way you cut it. So, if I am taking an extra slice of the pie out here, that leaves less of the pie for everybody else. I am presuming that, unless you can definitively say no, the small to medium sector are going to lose out.

Senator Fifield: I think that the small to medium sector is the big beneficiary of the decision that we have taken to return money to the Australia Council.

Senator BILYK: Which they would argue should never have been taken away anyway—as I would. Why was the $2 million a year retained by the department to provide an alternative avenue of funding for organisations that are not receiving funding through the Australia Council; and why was that amount selected?

Senator Fifield: I think you have given the rationale in your question for the decision: that there be an avenue for—

Senator BILYK: Okay, so why was $2 million selected? Why not $5 million or $500,000?

Senator Fifield: That was a decision of government.

Senator BILYK: So why won't the government fully restore the total amount of $105 million that was ripped from Aus Co but only the funds that are left after—I would call it—the experiment with Catalyst; and when will the sector receive new money from this government?

Senator Fifield: Questions about future funding are budget related, and we do not speculate about future budgets.

Senator BILYK: So I can look forward to budget week for maybe Aus Co getting more funding.

Senator Fifield: Senator, you know—

CHAIR: I take it that is a rhetorical question, Senator Bilyk?

Senator Fifield: governments do not speculate on budgets.

Senator BILYK: I am forever hopeful for the arts community, that is all; you cannot blame me for trying. What additional steps will be taken to repair the damage that has been done by the Catalyst program—by this government—since 2014? And will the government commit to not blindsiding the sector again?

Senator Fifield: I do not accept that characterisation of Catalyst. I think the organisations that have received Catalyst funding would be—

Senator BILYK: But it was done without any consultation with the sector.

CHAIR: Senator Bilyk, you have several times talked over the minister so, if you could just let him answer the question.

Senator Fifield: It is okay; it is late in the week.

CHAIR: It is.

Senator BILYK: I care about the arts community, Chair. What can I say?

Senator Fifield: I think there was a range of extremely good projects through Catalyst. There was a large number of organisations that received Commonwealth support that otherwise would not have in the absence of Catalyst. However, as I said I would, I consulted with the sector. I listened to the sector and recognised that we could strike a better balance in terms of how those funds were apportioned and how they were administered.

Senator BILYK: Are you able to tell me what percentage of recipients from Catalyst also received funding in prior years from Aus Co? I have heard that there has been duplication. People have said to me it is up to 90 per cent of Aus Co grants, so I was just wondering about that.

Senator Fifield: We can take that on notice. Your question probably has two parts—those who receive Catalyst funds who might be in receipt in other ways of Australia Council funding, and those who receive Catalyst funds who might have previously received Australia Council funding.

Senator BILYK: Thank you.

Dr Arnott : In terms of the claim about duplication, we worked closely with the Australia Council to ensure there was no duplication of funding at all between the Catalyst program and the Australia Council.

CHAIR: I have a couple of quick questions. I was a member of the Senate committee that did the inquiry into these programs, and one of the things that struck me was the criticism about the peer review process. When I had a look at the funding that was going to Western Australia, knowing just how vibrant and rich the arts are in both metropolitan and regional areas of Western Australia, we seemed to be missing out. As you know, that is a bit of a common theme in Western Australia in terms of funding. It seemed to me at the time that Catalyst was a good way of resetting that and getting more focus on rural and regional areas than some of these other programs that the peer review process did not seem to pick up. I am wondering if you have any comments, Mr Grybowski, perhaps, on the peer review process and some of the criticism at the time.

Mr Grybowski : Certainly—

CHAIR: Sorry, I think the minister would like to say something first.

Senator Fifield: Before Mr Grybowski answers, I cannot let the opportunity pass without recognising that I relatively recently appointed two good Western Australians to the council—

CHAIR: Indeed.

Senator Fifield: being Kate Fielding from Kalgoorlie, who is the Chair of Regional Arts Australia—

CHAIR: A great appointment.

Senator Fifield: and also Mr Sam Walsh. It is hard to find an arts body in the west that he has not been chair of. I just wanted to recognise that I as minister have been making a conscious effort to ensure that boards, including that of the Australia Council, have broad geographic representation.

CHAIR: Thank you. Mr Grybowski, I seem to recall—correct me if I am wrong—that Western Australia was not well represented proportionally. From memory, I think Queensland was not either. Could you talk about the peer review process? If we do not have time, I might ask for some further information on both WA and Queensland on notice.

Mr Grybowski : Thank you for the question on peer assessment. It has been one of the significant aspects of our reform—responding to comments and consultation with the sector. We currently have 650 expert peers from right across the country. To address this issue of geographic representation and other demographics, the representation from states like WA, Queensland and the territories is actually in excess of their proportion of population, particularly with WA. We never fund by geography. We obviously respond to the applications we receive, but we have seen that having representation from those states gives an appropriate assessment of the applications we receive.

CHAIR: So you are happy that it is now a bit more of a balanced process?

Mr Grybowski : Yes, and we have received very positive feedback from the peers. We constantly evaluate that particular process to ensure its efficiency and transparency and that the voices of the artists from all parts of the country are included in our decision-making process.

CHAIR: My last question I will ask you to take on notice, and I would ask you to provide these updates regularly through the estimates process. Could you provide state-by-state breakdowns of Australia Council funding and what it translates into per capita?

I do understand it is not always just about per capita; it is about the quality, depth and richness of organisations in the state. As we move forward, what are the trends in terms of expenditure and per capita expenditure? If you could take that on notice, I would be very grateful.

Mr Grybowski : I am very happy to take that on notice. Now that we have run five rounds of what we are calling our new grants program, we have processed and have the analysis on over 6,500 applications. That data will provide a body of knowledge about the trends. I am happy to provide that detail. Thank you.

CHAIR: Thank you very much, Mr Grybowski and Mr Blackwell, for appearing here today. Good luck with your board meetings today.