You know it’s strange times when Guido Belgiorno-Nettis is asking the federal government for money.
The scion of the Transfield engineering and construction dynasty isn’t asking for himself, of course.
Nor is he asking only on behalf of the Australian Chamber Orchestra, which on his watch (he’s been a director since 1996) has become one of the least government-dependent major arts companies in Australia – 89 per cent of the $22 million revenue it made in 2018 came from the box office, corporate sponsorship or donations.
But Belgiorno-Nettis, together with the chairmen of Opera Australia and The Australian Ballet, is calling on Canberra to prepare for a bailout of the entire performing arts industry.
With the re-opening of concert halls set to be one of the last stops on the road out of the COVID-19 pandemic, they say the performing arts can’t survive much longer locked out of its box office, where the industry earned $2.2 billion last year.
“I’m not embarrassed to ask for money, quite the contrary,” says Belgiorno-Nettis, dismissing any concerns about the optics of a multimillionaire rattling the tin for violins while unemployment heads past 10 per cent.
“At times like these let’s ask ourselves, what are the important things we treasure? The ACO are world-renowned, they’re one of the greatest ambassadors we have, and they’re just one example of how the arts is integral to our country’s make-up.”
Integral or not, the performing arts was the very first industry dispensed with when the Commonwealth banned gatherings of more than 500 people from March 16 in an attempt to halt the spread of COVID-19.
Overnight, the major companies fell victim to their own success in weaning themselves off Commonwealth funding, delivered by the Australia Council, that has not risen in real terms for a decade.
Now, there are fears among the chairmen spoken to by AFR Weekend that unless their companies are allowed back on stage by about September, cultural assets built up over decades risk disbandment without tailored government help.
The consensus is that last week’s collapse into administration of Carriageworks, a contemporary performing arts centre in Sydney, will be the thin end of the wedge.
“We’re the only opera company in the world that makes more than half its money at the box office, and that’s come back to bite us,” says Opera Australia chairman David Mortimer, who thought he’d seen it all in a corporate finance career spanning five decades.
“It’s just been horrendous.”
OA had been on a high after a record 2019 season, in which it sold 650,000 tickets. So the emotional pain of cancelling most of its 2020 season was acute, especially as it included starring roles for local sopranos Stacey Alleaume and Natalie Aroyan – respectively La Traviata on Sydney Harbour, and Verdi’s Attilla – which artistic director Lyndon Terracini had been building them towards for five years.
Then came the financial pain. At 600 full- or part-time staff, OA’s is by far the largest performing arts workforce in Australia, so the board needed a plan for them quickly. On March 25, OA announced that it would pay all its staff half their wages until the end of May, with the package also allowing staff to bring forward annual leave and long service leave to a maximum 80 per cent of previous salary.
The arrival five days later of the JobKeeper program, in which the Commonwealth chips in $1500 a fortnight for every employee kept on the books, has given OA breathing space to extend payments until about August, Mortimer estimates.
After that, the $20 million-plus cash reserves OA built with its success will be near depleted. The chairman can hardly bring himself to contemplate selling the company’s headquarters in Surry Hills or its storage warehouse in Alexandria, which together were valued at $17.7 million at the end of 2018.
“It’s the beginning of the end when you sell off your buildings,” he says.
So at least some of OA’s staff face being stood down on JobKeeper alone, and with no firm date for the return of gatherings over 100 people in sight, Mortimer worries their skills will be lost to the company.
“A member of our orchestra might have been part-time with us, part-time with some other shows around town, maybe tutoring some students. Suddenly all that income is gone, and they need to find another way to keep a roof over their head,” he says.
A similar scenario haunts Belgiorno-Nettis at the ACO, where musicians and administrative staff have had their paid hours reduced by 40 per cent until at least September 28. It’s a painful outcome for a man so passionate about the ensemble that in 2018 be bought it a 300-year-old Stradivarius violin.
Meanwhile, Australian Ballet chairman Craig Dunn has just overseen a company-wide consultation that from next week will cut 20 per cent from the salaries of dancers and support staff.
“We can see our way through to the end of the year,” says the former AMP boss, who is also finalising a bank loan to help the ballet company bridge these months without box office, which accounted for 65 per cent of its income in 2019.
However, Dunn knows the new financial pressure will add to the mental strain on staff, especially the dancers, for whom this enforced furlough is cutting into careers that are preciously short at the best of times.
“For all the daily contact and the daily exercises we’re beaming out to them, we know that it’s that much harder maintaining your fitness and your motivation at home than it is in the studio, collaborating with your peers,” he says.
Opera singers face a similar problem keeping up “match fitness” in isolation, according to Terracini.
“A lot of our people live in small apartments, so the neighbours aren’t going to be thrilled about someone roaring their head off all day.”
It’s easy to understand why, despite the frightening financial numbers, keeping the company’s skills together is the OA chairman’s top priority in this crisis.
“Having built it to such a level of excellence, it would be a tragedy to let that slip,” Mortimer says. “We’re confident we can do that, but it’s not easy.”
Not easy, because it takes money to keep paying those staff beyond JobKeeper levels, and reduce the temptation to seek steadier work elsewhere.
That in turn requires Canberra to do something special for the arts beyond JobKeeper, a program federal Arts Minister Paul Fletcher estimates will already pour between $4 billion and $10 billion into the sector’s coffers.
That would be the biggest one-off injection ever into a sector whose annual funding is just under $750 million.
In a statement, the Minister said the government was “monitoring the situation very closely”, and would work alongside the sector as the nation built a path to recovery.
However the chairmen agree that the performing arts industry has a case to make for additional financial measures, and not just because recordings of their shows are among the things the public is binging on to cope with home isolation.
They also represent a big chunk of the 600,000 creative industries workers identified by the Australian Bureau of Statistics before the pandemic, up to 75 per cent of whom the Grattan Institute forecasts could now lose their jobs.
“The performing arts were the first affected by this crisis – our revenue went from normal to zero overnight – and we’ll be the last out the other end,” says Bongiorno-Nettis.
While patrons have written the ACO whatever cheques their battered share portfolios will allow them to, and about one-third of ticket-holders have converted the money owed them into a donation rather than a credit or refund, the chairman says it’s simply not enough.
“Philanthropy buys us a few weeks, but realistically, come the end of September we’ll be forced to cut into the organisation without extra government assistance,” he says.
“Even with JobKeeper, we’re significantly underwater.”
The hope that the chairmen all cling to is that by September, their companies might just be able to get back on stage.
“We’ll be watching closely as the art galleries re-open, then maybe they start allowing small crowds at the football stadiums,” Mortimer says.
“If all that happens without an increase in infections, maybe the government gets more comfortable in relaxing some of the other rules.”
Terracini is hopeful that before month’s end, he’ll be able to get a couple of singers at a time back into the studio with a vocal coach. And while the ACO’s artistic director Richard Tognetti says his musicians will “put the tent back up in half a day” once they’re back together in a practice room, Dunn would love to see the Ballet’s dancers back at the barre as soon as possible.
“I don’t know if you call it a ‘pre-season’ in ballet, but certainly the dancers need six or eight weeks of full-on rehearsal before they’re physically ready to perform,” Dunn says.
The Ballet will do whatever is right to protect the health and safety of its performers and audience, Dunn adds, even if that means the latter agreeing to temperature checks and wearing masks.
“I expect some parts of the sector are likely to be able to resume activities earlier than others,” the Minister said.
“For example museums and galleries are likely to be able to operate in a way which is consistent with social distancing. Work is underway in the sector on developing appropriate protocols.”
However, all the chairmen agree that it’s not viable for any major performing arts company to return to the stage while the 1.5-metre social distancing rules remain in place, effectively reducing venues to about 30 per cent of their full capacity.
“Our business model doesn’t support us playing to any less than 1000 people at a time,” Bongiorno-Nettis says.
Not that any of the chairmen are lobbying for a relaxation of measures that have flattened the coronavirus curve, even if these have flattened the performing arts in the process.
“It’s not as if our requests are falling on deaf ears, and we know the government can’t bail out everybody,” Bongiorno-Nettis says, but he still thinks the relevant industry bodies have mounted a compelling argument for a targeted package.
One of those bodies, Live Performance Australia, asked for an $850 million rescue package just after the mass gathering ban. The subsequent passage of the JobSeeker and JobKeeper packages ticked off some of its wishlist, but it is still hoping for $180 million in additional Australia Council funding to help companies not merely keep what employees they can on their books, but avoid going into administration and scattering to the winds.
“Paul [Flecther] has indicated his interest – now we have to wait and see whether he’s taken note of it,” Bongiorno-Nettis says.
Dunn praises the government’s handling of both the health and economic crises so far. A loosening of rules to allow Australia Council funding to be brought forward or repurposed from projects to operational expenses will have helped recipients, he says, even if they’ll no doubt miss that money down the track.
However, Dunn is preparing to put his argument for extra emergency funding more forcefully should there be no return to the stage by the end of 2020.
“There has to be a case that the government has another look at it by then,” he says.
Mortimer is quietly confident that if it comes to it, the government will. And that’s not just because he has a lot of friends in Canberra, having been hired by the federal government over the years to review everything from defence procurement to customs reform.
“The optics of the arts getting money has always been a bit of problem, even though we’ve had no increases other than indexation for years,” he says.
“But I think government will find it a bit more awkward when they’ve got an Opera House with no operas in it.”
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