Service and Creative Skills Australia (SaCSA) has made a formal submission to the NSW Government’s consultation on Cultural Tax Reform, highlighting how the current taxation system is holding back the state’s creative industries.
The submission draws on extensive consultation with stakeholders, including artists, employers and unions, and reflects a united call for reforms that will better support workforce development and long-term sustainability.
This submission comes at a critical time, ahead of the Australian Government’s future review of Revive, its five-year National Cultural Policy.
Key Issues
SaCSA’s Workforce Plan Update identified that workforce development in the creative sector is heavily constrained by working conditions and their impact on attraction and retention.
- The sector has a high prevalence of freelance, contract and casual work, often combined with low pay, leading to financial and job insecurity.
- Taxation conditions further discourage artists, with prizes, grants and fellowships taxed inconsistently compared to standard employment. Meanwhile, gambling windfalls on arts prizes are not taxed at all.
- Almost all Australian artists have “portfolio careers,” working with multiple employers across creative and non-creative roles. This contributes to high casualisation, with the Arts and Recreation Services industry recording the third-highest rate nationally (32%).
- Artists earn, on average, 26% less than the broader Australian workforce, with wages flat in real terms and less than half of income drawn from their own creative work.
SaCSA believes targeted tax reforms could make creative careers more appealing by improving income levels and stability. Such reforms would also improve opportunities for communities disproportionately affected by insecure employment, including First Nations peoples and people living with disability.
SaCSA’s Recommendations
SaCSA is calling for tax changes that recognise the unique nature of creative work and help to build a fairer, more sustainable sector. Our recommendations include:
- Tax-free recognition for creativity: Make grants, prizes and fellowships exempt from income tax.
- A separate tax-free threshold for creative income: Introduce a higher threshold that applies only to earnings from creative work. This would encourage artists to continue their practice without being penalised by the tax system when their main income comes from other jobs.
- Reform the Non-Commercial Losses provision: Raise the current $40,000 cap to $120,000, giving more artists the ability to offset creative losses against other income and balance multiple sources of work.
- A Creative Industries Management Deposit Scheme: Modelled on farming arrangements, this scheme would allow artists to set aside income from strong years to provide stability in leaner times.
- Establish a Creative Industries Tax Offset Scheme: Based on the UK’s Corporation Tax reliefs, this scheme would support the development of local creative intellectual property while attracting international productions and events.
- Expand the definition of ‘work-related education expenses’: Allow creative workers to claim professional development in areas such as finance, marketing and management, recognising the broader skills needed for sustainable careers.
These reforms would give artists and employers greater certainty, reduce financial insecurity and make creative careers more attractive to the next generation.
“This submission is the product of wide consultation with employers, unions and creative workers across NSW. It reflects SaCSA’s role as an industry-led Jobs and Skills Council, ensuring that government decisions are informed by the voices and lived experiences of our workforce, ” said Alex Joiner-Knoop, General Manager – Policy and Government Relations.
Looking ahead, SaCSA will continue our tripartite approach to consultation to ensure the voices of creative workers are heard. By modernising our tax system, we can create the conditions for a stronger, more sustainable Arts sector.
We thank the NSW Government for leading this important conversation and look forward to continuing it at the Art of Tax Reform Summit later this month. Read SaCSA’s full submission to the NSW Cultural Tax Reform to see all six recommendations and the evidence behind them.