New analysis released today finds that a combined tax offset for existing live music venues and those not currently hosting live music could boost the incomes of musicians and artists by $205 million per year with an additional 203,200 gigs, supporting the creation of 7,400 direct and indirect jobs across entertainment, hospitality and tourism.
The study by BIS Oxford Economics was commissioned by music industry body APRA AMCOS to assess how tax offsets levied at Australian venues staging live music might support an economic rebound from the COVID-19 pandemic and foster a healthy live performance ecosystem over the long term.
“The role that live music plays in the economic, social and cultural fabric of Australia cannot be overstated. A healthy live music scene in our cities, regional centres and towns provides them with a competitive advantage and is the feeding ground for Australia’s fast growing musical exports,” said Dean Ormston Chief Executive APRA AMCOS.
“Over the last thirty years in Australia, a shifting regulatory, audience and digital environment has radically altered the playing field for the live music sector. Changes in the urban environment have brought long standing music venues into conflict over amenity issues, and a tightened regulatory framework has inhibited the development of new business models.
“As well as this, the onset of digital technologies has radically altered traditional income streams and caused the entertainment market to diversify. In this way, the Australian live music sector has, despite its ongoing popularity, been limited in its ability to grow.
“That is why a tax offset to support the growth of live music would not only be a catalyst for the social and cultural development of live music it would also provide an injection of confidence across the tourism and hospitality economy.
“The Australian Government has supported numerous important national cultural sectors, with the recent establishment of a digital games offset as well as the long-established screen industry incentives with production, post-production and location offsets.”
The live music ecosystem was decimated during the COVID-19 pandemic as public health orders resulted in the cancellations of thousands of gigs. Venues sat empty for months on end and APRA AMCOS licensing data revealed that at its lowest point, venue-based live music activity was 4 per cent of pre-COVID activity.
A survey of 325 hospitality venues conducted by APRA AMCOS and BIS Oxford Economics found that one in seven venues believe they will never host as many live music performances as they did pre-COVID. Taking into account the other long term challenges the industry was facing even prior to the pandemic this represents a substantial additional blow to Australia’s musical ecosystem and exports.
The report identified the optimal policy scenario that considered the direct costs to Government and assessed how these costs compared to the benefits to Government in the form of the additional tax revenue from additional economic activity. The report also investigated a potential program to provide a refundable offset calculated as a share of artists travel expenses, however the indirect flow-on effect of this policy was not estimated.
“Live music, whether it is at the local pub, club, concert venue or festival, is the beating heart of Australia’s cultural life. This is not a bottomless offset and would be quantifiable in a direct return to taxpayers due to the finite number of potential venues,” Dean Ormston said.
“Apart from establishing a vibrant culture in Australia’s cities and rural centres and enhancing quality of life, supporting live music also provides other long-term benefits such as enhancing Australian music exports and soft power.
“With Australia’s ambition to be a net exporter of music in the next ten years, a tax incentive like this would target the base of the music pyramid and be a catalyst for Australia’s national and international musical success.”