'Ridiculous' secrecy: confusion surrounds fate of $7m arts bailout money in $50m NSW government scheme

Kelly Burke
·8-min read
<span>Photograph: Cavan Images/Alamy Stock Photo</span>
Photograph: Cavan Images/Alamy Stock Photo

The New South Wales government has spent less than $13m of its $50m rescue package for arts organisations hit by the Covid-19 shutdown.

When the scheme was first announced almost six months ago, the NSW government said the $50m Rescue and Restart funding would be distributed in two rounds.

With the second round of grant applications now open to access $30.1m, it is not clear how almost $7m from the NSW government’s emergency scheme is being spent.

Guardian Australia has heard claims from industry sources that the $7m was in fact dished out among NSW arts organisations at the minister’s discretion, outside the formal Rescue and Restart grant application processes, and that the process was conducted with “ridiculous” secrecy.

The office of NSW arts minister Don Harwin denies that money has been disbursed at his discretion and said that the $7m was a provision for vulnerable companies.

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Some 42 arts organisations have been funded through the first tranche of grants, but almost half of the $12.9m disbursed through the formal grants process went to a single company, according to information obtained by Guardian Australia through Government Information Public Access (Gipa), the state equivalent of freedom of information laws.

The Sydney Theatre Company has secured $6m of the funds officially allocated so far.

The only other company that comes close to that figure in bailout money is Kirribilli’s Ensemble Theatre, which secured $1.58m.

Guardian Australia has been told by a number of arts organisations that they were instructed by the NSW government not to reveal publicly how much emergency funding they received under the Rescue and Restart scheme.

When Guardian Australia asked the office of the arts minister in December why there appeared to be no publicly accessible data on grant recipients, a spokesperson said there were issues of commercial in confidence.

It was only through the Gipa process that Guardian Australia was able to confirm the figures, including STC’s half share in the $12.9m.

Harwin’s office told Guardian Australia last week the minister played no role in deciding who would get funding and how much, with the giant accountancy firm PwC Australia engaged to appraise applications for grants over $100,000 after they have been assessed by Create NSW. The minister told the NSW legislative council’s Public Accountability Committee in October last year that he signs off on recommended recipients “exactly as recommended.”

NSW arts minister Don Harwin.
NSW arts minister Don Harwin. Photograph: Richard Milnes/REX/Shutterstock

The minister was last week also sent a list of questions about the Covid-19 funding decisions and provided the following written response: “The minister does not comment on the financial circumstances of any applicant for funding nor does the minister provide commercial in confidence information.”

The STC board is widely viewed as the most powerful arts board in the country. Members of the Packer, Triguboff and Belgiorno-Nettis families sit at the table, along with former ABC chief now secretary of the NSW Department of Education, Mark Scott.

The STC board is chaired by the former managing director and chief executive officer of the Commonwealth Bank Group, Ian Narev, who resigned amid the 2017 banking scandal, and a former CBA colleague, David Craig, is also on board. Craig is a past chief financial officer of PwC Consulting and joined the STC board in September 2020. There is no suggestion by Guardian Australia that Craig was involved in lobbying PwC for funding.

In response to questions about what if any lobbying was done by the company’s board, an STC spokesperson said in a statement: “STC followed the application process and was assessed according to the criteria alongside other cultural organisations.”.

During the six-month lockdown due to the pandemic, STC lost almost $18m in revenue and had been placed at risk of insolvency, the company’s statement said.

“The NSW government’s injection of cash via the Rescue and Restart fund allowed the company to survive the closure of theatres and to recommence trading in September, and we are extremely grateful for this support,” the statement said.

Dr Cecelia Cmielewski, the research officer at the Western Sydney University’s Institute for Culture and Society, who worked in arts policy at the Australia Council for more than a decade, said the inequity of distribution apparent in the first tranche of grants reflected “very poor decision-making”.

With respect to PwC’s oversight on grants over $100,000 she said, “I wonder if it’s to make the government look squeaky clean, in the light of the sport rorts decisions,” she said, referring to the Berejiklian government funnelling 95% of a $250m community grants program into Coalition seats prior to the 2019 state election and the federal Coalition government’s sports funding scandal of 2020 which is now the subject of a Senate committee inquiry.

The $50m Rescue and Restart package was announced on 24 May by the premier, Gladys Berejiklian, and the treasurer, Dominic Perrottet. Harwin was temporarily standing down as arts minister following a fine for a quarantine breach during lockdown. He had the fine overturned and he was reinstated as arts minister on 3 July.

The rescue package was hailed by Berejiklian then as the “largest dedicated arts and cultural support package of any jurisdiction in Australia” and applications closed for the first round of grants at the end of October 2020.

On 8 November Harwin announced that a second tranche of $30.1m under the Rescue and Restart scheme was now open to applicants. But with just $12.9m distributed in the earlier round, the fate of the remaining $7m is unclear.

One arts administrator, whose organisation received a sizeable six-figure Covid assistance grant not listed on the Gipa documents provided to Guardian Australia, said: “Every [arts] body funded by Create NSW got a piece [of the outstanding money] … Don’t get me wrong, we’re happy we got the money, but the secrecy surrounding it all is ridiculous.”

On Tuesday Harwin’s spokesperson told the Guardian in a statement: “In regard to the $7m, provision has been made to fund vulnerable companies.”

On Wednesday, when asked to respond to allegations the $7m had been disbursed among NSW arts companies in secrecy at the minister’s discretion, the spokesperson told the Guardian: “The allegations made by the unnamed arts administrator are wrong. The $7m has not been allocated.”

When the Guardian asked the minister’s office to clarify, the spokesperson said: “A ‘provision’ is not an ‘allocation’.”

A former government departmental head who has overseen arts and other major grant programs said the lack of public disclosure surrounding the administration of the NSW government’s Covid-19 relief for arts organisations was concerning.

It’s public money ... therefore there must be a publicly accountable system to distribute the grants

Cecelia Cmielewski

The former bureaucrat, who spoke on condition on anonymity because they also sit on the board of a performing arts organisation, said the lack of transparency was surprising, given the Coalition governments at both a NSW and federal level are still wearing the fallout from accusations of grant rorting.

“Good practice would mean that any government funding should be totally transparent; it’s one of the reasons that the Australian government created the Australia Council, to get much more transparency and engagement with the sector and the broader community in setting priorities,” the former bureaucrat said.

“We’re not dealing with philanthropic funds here, we’re dealing with public money, provided for a public purpose, so it is important that full and open disclosure be made in the public realm.”

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Cmielewski said the minister’s claims there were issues of commercial in confidence in disclosing how much public money companies received didn’t wash.

“It’s public money … they had a callout for grant applications, so, therefore, there must be a publicly accountable system to distribute the grants.”

At state level, most cultural bodies have already received Covid-related one-off grants. Victoria, Western Australia and Queensland have publicly disclosed in detail who got what.

The exception appears to be NSW, which ceased publishing any data of grants to the arts on the Create NSW (formerly Arts NSW) website soon after Harwin was appointed minister in January 2017.

Harwin’s office did not respond to Guardian Australia’s request for an explanation as to why these reporting protocols have ceased.

A spokesperson for Create NSW said the arts funding program was “reformed” in 2019 and new mechanisms for providing feedback and support to grant applicants adopted, none of which appear available to the public on its website.

“Funding recipients are published on the website through the [minister’s] media releases,” the spokesperson said.

No media release has been issued detailing the recipients and their grant allocations under the first tranche of the Rescue and Restart scheme.

This article was edited on 14 January 2021 to note when David Craig joined the STC board and to clarify STC’s response to Guardian Australia’s questions

• This article was amended on 14 January 2021 in the light of further material received from the minister’s office after publication, to clarify the grant allocation process and the role of PwC