With the cancellation of tours of a number of commercial musical productions in 2026, the discussion about different ways to invest in the arts including tax offsets has come up again. As someone who now lives in Perth, I’m likely to be impacted by such cancellations because Perth is the furthest away from producing centres such as Melbourne and Sydney and therefore more expensive to get to. And on the demand side, we’re the smallest state capital after Adelaide and thus have a lower potential audience base. On both sides of the supply/demand ledger, Perth is a potential challenge for commercial producers. And I don’t want to miss out.
If you want to get a quick snapshot of the argument, see this ABC segment: https://www.abc.net.au/news/2026-07-07/calls-for-tax-incentives-to-save-live-theatre/106890186
There’s always the fear that a loss of government income via tax offsets might mean that other parts of government funding of the arts might suffer but if Live Performance Australia is right in their calculations, the return to government will be much higher than the initial cost. If it works for film, why not try it for live theatre? The British have done it since 2014 with a system of tax savings and credits: https://www.friendpartnership.com/theatre-tax-relief
The Australian Financial Review is against this idea saying that Australian producers should simply cut their cloth to match the current economic circumstances and the geography of the country: https://www.afr.com/life-and-luxury/arts-and-culture/live-theatre-tax-break-would-be-rent-seeking-for-the-lion-king-20260702-p60bx5
The writer, a “former performing artist” claims that current cancellations are “a professional failure to meet forecasts and implement contingencies”. There is, he says, an “existential risk” of falling into reliance upon government subsidies. But why is that a bad thing? Why shouldn’t governments invest in the arts? Ever since Baumol and Bowen (1966) pointed out the ever-widening gap between costs and earned revenue in the performing arts because their labour requirements remain the same as they were hundreds of years ago, the need for government support if we value the performing arts has been known. Countries like ours provide subsidies to all sorts of industries from mining to manufacturing, tourism and sport, so why not culture?
Instead, the AFR suggests smaller venues, shorter runs, and single-city staging. The author clearly doesn’t understand those economics because the result will either be pro-am companies producing large scale work such as musicals (with the performers subsidising the show by not being paid) or comedy-scale productions with one or two performers and limited production values.
The AFR alternative to tax offsets is to put subsidised tickets in the hands of the audience but that doesn’t solve the problem of finding the investment and the risk takers to put the show on in the first place.
As long as an investment model supports the development of new Australian work by currently subsidised companies as well as the presentation of international musicals by commercial producers – and as long as I get to see the shows in Perth – I’m happy to pay some extra tax to ensure the health of the our performing arts ecology.
[Baumol, W & Bowen, W 1966, Performing Arts, The Economic Dilemma: a study of problems common to theater, opera, music, and dance, Twentieth Century Fund, New York]