Government funding for heritage and arts

IBISWorld expects government funding for heritage and arts to increase by 2.0% in 2023-24, to $9.99 billion. In the current year, the rise in government funding is aimed at immediately aiding artists, arts organisations, cultural institutions, educational entities, and supporting crucial sectors of the new National Cultural Policy, Revive. The majority of the funding initiatives seek to make arts offerings more accessible and enhance arts and creative infrastructure.

In 2021-22 (most recent available data), 40.0% of government heritage and arts funding came from state and territory governments, excluding environmental heritage. The largest areas of expense for state and territory governments in 2021-22 were environmental heritage, museums and other cultural heritage and performing arts venues. In the same year, the Federal Government accounted for 38.1% of the overall expenditure on arts and heritage. The remaining 22.0% was attributable to local governments, excluding environmental heritage. State and territory governments have increased as a share of expenditure over the four years through 2021-22.

Expenditure on environmental heritage has been in a long-term decline. In the current year, environmental heritage expenditure is expected to total $1.2 billion, down from $1.4 billion a decade prior. This decline is expected to be related to a wider decrease in environment-related expenditure by the Federal Government. For instance, a sharp rise in land clearing over the past few years has placed downward pressure on environmental heritage expenditure over the same period.

Heritage and arts spending by the government has exhibited an upward trend over the past few years, driven by economic growth and COVID-19 support for the arts. The growing Australian population has resulted in increased demand for government-provided heritage and arts services, while governments also provide these services to grow the attractiveness of the country to foreign tourists. Grants paid by the Federal Government to local governments to cover expenses that include arts and heritage funding had their indexation frozen for three years from 2014-15, up to and including 2016-17. However, in 2017-18, the indexation applied to these grants was restored, significantly boosting expenditure over the year. The reapplication of this index also supported expenditure growth over the few years through 2021-22. In 2021-22, funding elevated significantly as a result of increased government support for the arts as well as a changeover of government. Pandemic-related stimulus for the arts is expected to be substantially lower during the following years. Overall, IBISWorld forecasts government funding for heritage and arts to rise at a compound annual rate of 3.7% over the five years through 2023-24.