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1、Economic impact of music industry tax offsets THE ECONOMIC IMPACT OF TAX OFFSETS ON THE LIVE MUSIC INDUSTRY REPORT FOR APRA AMCOS HARRY GOOD ANDREW TESSLER SEPTEMBER 2022 Economic impact of music industry tax offsets 1 ABOUT BIS OXFORD ECONOMICS Oxford Economics was founded in 1981 as a commercial v

2、enture with Oxford Universitys business college to provide economic forecasting and modelling to UK companies and financial institutions expanding abroad.Since then,we have become one of the worlds foremost independent global advisory firms,providing reports,forecasts,and analytical tools on 200 cou

3、ntries,100 industrial sectors and over 3,000 cities.Our best-of-class global economic and industry models and analytical tools give us an unparalleled ability to forecast external market trends and assess their economic,social,and business impact.Headquartered in Oxford,England,with regional centres

4、 in London,New York,and Singapore,Oxford Economics has offices across the globe in Belfast,Chicago,Dubai,Miami,Milan,Paris,Philadelphia,San Francisco,and Washington DC.We employ over 300 full-time people,including more than 200 professional economists,industry experts and business editorsone of the

5、largest teams of macroeconomists and thought leadership specialists.Our global team is highly skilled in a full range of research techniques and thought leadership capabilities,from econometric modelling,scenario framing,and economic contribution analysis to market surveys,case studies,expert panels

6、,and web analytics.Underpinning our in-house expertise is a contributor network of over 500 economists,analysts,and journalists around the world.Oxford Economics is a key adviser to corporate,financial and government decision-makers and thought leaders.Our worldwide client base now comprises over 1,

7、500 international organisations,including leading multinational companies and financial institutions;key government bodies and trade associations;and top universities,consultancies,and think tanks.In March 2017 Oxford Economics purchased the respected Australian forecasting and consultancy company,B

8、IS Shrapnel to become BIS Oxford Economics.BIS Oxford Economics has an Australian staff of over 50.It combines deep knowledge of the Australian economic environment with access to Oxford Economics global capabilities to provide powerful insights to clients.SEPTEMBER 2022 All data shown in tables and

9、 charts are Oxford Economics own data,except where otherwise stated and cited in footnotes,and are copyright Oxford Economics Ltd.This report is confidential to APRA AMCOS and may not be published or distributed without their prior written permission.The modelling and results presented here are base

10、d on information provided by third parties,upon which Oxford Economics has relied in producing its report and forecasts in good faith.Any subsequent revision or update of those data will affect the assessments and projections shown.BIS Oxford Economics,Level 6,7 Macquarie Place,Sydney,2000,Tel:+61 2

11、 8458 4200 Economic impact of music industry tax offsets 2 TABLE OF CONTENTS Executive summary.4 1.Introduction.11 1.1 Background.11 1.2 Scope of this report.17 2.Challenges facing musicians and venues.19 2.1 Pandemic specific challenges.19 2.2 Long term challenges facing musicians.22 2.3 Long term

12、challenges facing venues.24 2.4 Potential action areas.26 3.Tax offset methodology:Venues.29 3.1 Defining key measures.30 3.2 Defining the venue based live music industry.30 3.3 Establishing the tax offset scenarios.31 3.4 Data collection.31 3.5 Defining the base case.32 3.6 Estimating the economic

13、contribution.32 4.Economic analysis.36 4.1 Modelling results.36 4.2 Venue response to offset incentives.37 4.3 Direct economic impacts.42 4.4 Total economic impacts.45 4.5 Implementation.49 5.Supporting artists beyond the pandemic.50 5.1 Background.50 5.2 Workshopping options for artist support.52 E

14、conomic impact of music industry tax offsets 3 5.3 Objectives.52 5.4 Instrument of funding(grants v.tax offsets).53 5.5 Eligible expenses,Artists&administration.53 5.6 Broader economic costs&benefits.55 6.Appendix 1:Venue survey results.57 7.Bibliography.67 Economic impact of music industry tax offs

15、ets 4 EXECUTIVE SUMMARY PURPOSE OF THE REPORT Prior to the COVID-19 pandemic the venue-based live music industry was a significant part of the economy,and an important part of Australians social and cultural lives.Close to half of all Australians accessed live music in 20191.In 2018/19 around 5,000

16、venues hosted over 10,000 unique musicians and bands who performed over 400,000 gigs to audiences around Australia.In total these gigs helped generate over$2.4 billion in direct revenue for venues in 2018/19(based on spending on tickets,cover charges&food and beverages during live music nights)and s

17、upported 23,700 jobs.The live music ecosystem was decimated over 2019/20(FY20)&2020/21(FY21)with the impact of COVID-19 as public health orders resulted in the cancellations of thousands of gigs.Venues sat empty for months on end.A survey of live music venues conducted by APRA AMCOS and BIS Oxford E

18、conomics in November 2021(“the venue survey”)suggests the number of venue-based live music gigs was some 70%less in 2020/21(FY21)compared to 2018/19(FY19)levels.APRA AMCOS licencing data revealed that at its lowest point,venue-based live music activity was 4%of pre-COVID activity.The pandemic has ta

19、ken a heavy toll on the creative and cultural industries,with UNESCO recently declaring these industries are facing“an unprecedented crisis”2.The pandemic exacerbated structural challenges facing venues and artists.The income song writers and artists receive from live performance is increasingly imp

20、ortant in the digital streaming age,where streaming royalties often represent a significantly smaller proportion of even successful musicians overall income streams.Musicians have become heavily reliant upon live performances to monetise their fanbase.The closure of venues prevented this exchange fr

21、om occurring,drying up artists key source of income.Many established artists have quit the industry,with others less likely to enter.Australias network of venues is essential cultural infrastructure that facilitates live music.They provide the training grounds on which artists develop their talents

22、and build a fanbase.The gigs they host are a precursor to exports.Without our stages many of Australias most successful artists would never have mastered their craft and gone on to export their music to the rest of the world.Less musicians playing on fewer stages threatens the Australian music indus

23、trys vision of becoming a net exporter of music.Prior to the pandemic government 1 The Australia Council,Creating Our Future.(2020)2 Reshaping Policies for Creativity:Addressing Culture as a Global Public Good;Executive Summary-UNESCO Digital Library.(2021)70%decline in venue based live music in 202

24、0-21 compared to pre-pandemic levels 1 in 7 venues believe theyll never host as many gigs as they did pre-pandemic 1 in 7 venues believe theyll never host as many gigs as they did pre-pandemic Economic impact of music industry tax offsets 5 support for contemporary music had been geared towards non-

25、for-profit cultural institutions.The Federal and State Government response to the economic fallout of COVID-19 has been substantial,assisting many private venues for the first time.Yet the grants distributed as a part of the Government response only reached a subset of venues and artists.Grants were

26、 typically distributed to large organisations,festivals,and events.Most venue-based businesses,such as local pubs,missed out on live music related support.Without more targeted policy interventions,the venue-based live music industry is not expected to recover over the long-run;one in seven venues s

27、urveyed believe they will never host as many live music performances as they did in 2018/19.Taking into account the other long term challenges the industry was facing even prior to the pandemic this represents a substantial additional blow to Australias musical ecosystem.LIVE MUSIC TAX OFFSET FOR VE

28、NUES DEVELOPMENT AND TESTING OF OPTIONS BIS Oxford Economics has been engaged by APRA AMCOS to assess how tax offsets levied at venues staging live music might support an economic rebound from the pandemic and foster a healthy live performance ecosystem over the long run.This report explores how tax

29、 offsets,calculated as a share of live music expenses,might incentivise:1.Venues(that previously hosted live music)to increase the number of live performances hosted;and 2.Venues(who have not previously hosted live music)to host live music.This report also estimates the economic impact of the change

30、s in venues hosting decisions in response to several tax offset scenarios levied on live music expenses:Value of tax offset Existing live music venues 5%of expenses 10%of expenses 20%of expenses Non live music venues$12,000$24,000$48,000 Responses to a survey,distributed to over 19,000 hospitality v

31、enues,derived from the APRA AMCOS music licensing database,provides the basis of assessing how venues hosting decisions would change according to the above incentives.The report also discusses some options for potential support for artists beyond the pandemic using measures such as tax offsets.2 in

32、3 venues Agreed a tax offset would encourage them to host more live music performances Economic impact of music industry tax offsets 6 RESULTS SHOW TAX OFFSETS WOULD ACT AS A STRONG INCENTIVE TO HOST MORE MUSIC 64%venues that didnt host live music in 2018/19 agreed a tax offset of at least 12K would

33、 be an incentive to begin hosting live music.These venues would host an average of 16 gigs/year.This translates to 150,000 additional gigs/year.60%venues that previously hosted live music agreed a tax offset of at least 5%would encourage them to host more live music.These venues would host an averag

34、e 18 more gigs/year.This translates to 52,000 extra gigs/year.Fig.1.Additional gigs supported by tax offset initiatives Venues not hosting live music Venues hosting live music Scenario Base 12K 24K 48K 5%10%20%Gigs/year 424,800 575,300 612,500 655,400 477,500 488,900 516,700 Increment-+150,500+187,7

35、00+230,600+52,700+64,100+91,900 Attendance/year(millions)70.5 87.2 90.3 94.9 85.1 86.5 90.6 Increment-+16.7+19.8+24.4+14.6+16.0+20.0 Source:BIS Oxford Economics A combined venue offset could lift artists venue-based performance incomes by 40%.More gigs directly translate into more musicians hired an

36、d paid to play.In total,artist incomes are expected to lift by between$93 to$168 million depending on the scenario modelled.If tax offsets were applied to both live and non-live venues(assuming a 5%offset for existing venues and$12,000 offset for non-live ones)the lift in income would be an estimate

37、d$205 million above existing artist venue-based incomes of$500 million.Fig.1.Tax offsets effect on artist incomes(incremental rise)Source:BIS Oxford Economics,n=143$205m boost to artist incomes$93$103$126$112$136$168$0$20$40$60$80$100$120$140$160$1805%10%20%12K24K48KIncremental rise($m)Venues hostin

38、g live musicVenues not hosting live musicEconomic impact of music industry tax offsets 7 More live music will lift venue revenues.Survey responses demonstrated that close to 50 per cent more people attend and spend at venues on a live music night(183)relative to a non-live music night(124).The incre

39、ase in gigs per year lifts the total number of patrons attending and spending at venues.This lifts total venue revenues.Total revenues of non-live music venues are estimated to rise by$247m in the 12K tax offset scenario,this equates to approximately additional$30,000/year per venue.Total revenues o

40、f live music venues are estimated to rise by$235m in the 5%offset scenario,this equates too approximately$80,000/year per venue.Fig.2.Direct venue revenues:Base case and incremental impacts($m)Item Base case($m)Tax offset scenario ($m incremental change to base)Non-live venues Live Venues Scenario R

41、evenue$12K$24K$48K 5%10%20%$2,442+$247+$300+$375+$235+$253+$322 Source:BIS Oxford Economics analysis The venue offset would boost the sectors total contribution to Gross Value Added(GVA)and employment.As indicated above,venue offsets could produce some 52,700 to 230,600 additional gigs per year depe

42、nding on the option chosen.Further,based on the survey results(and allowing for flow-on effects across the economy)we find that application of the tax offsets would:-boost annual industry GVA(similar to GDP)by between$310 million(i.e.an increase of approximately 10%)and$495 million(an increase of 15

43、%);and -contribute to employment by between 3,600(an increase of 10%)and 5,800 jobs(an increase of 15%),depending on the scenario modelled.These figures include both direct effects on venues themselves and indirect employment benefits,which flow into associated industries such as retail trade,manufa

44、cturing and professional services.For example,depending on the scenario modelled,the injection provided by the offsets would contribute up to a 16%increase in retail jobs(compared to the business-as-usual base)and up to a 15%increase above base employment in the manufacturing and professional,scient

45、ific and technical services sectors.48%more patrons attend and spend at a venue when they host a gig Economic impact of music industry tax offsets 8 Fig.3.Scenario results:GVA incremental to base case Fig.4.Scenario results:Employment incremental to base case 326 397 495 310 333 425 10200400600$12K$

46、24K$48K5%10%20%Source:BIS Oxford Economics$mVenues staging live musicVenues not staging live music3,814 4,643 5,800 3,626 3,903 5,000 101,0002,0003,0004,0005,0006,0007,000$12K$24K$48K5%10%20%Source:BIS Oxford EconomicsVenues staging live musicVenues not staging live musicEconomic impact of music ind

47、ustry tax offsets 9 IDENTIFYING THE OPTIMAL POLICY SCENARIO Identifying the optimal policy specifications for any offset scheme requires consideration of the direct costs to the Government,in forgone taxation and rebates,and assessing how these costs compare to the benefits to Government,in the form

48、 of the additional tax revenue from additional economic activity.Estimates of the direct costs of Government from the proposed offsets range from$110m to$440m for venues not currently hosting,and$60m to$230m for venues currently hosting,depending on the scenario3.Estimates of the benefits to the Gov

49、ernment,in terms of additional tax revenue,ranging from$90m to$140m for venues not currently hosting,and$90m and$120m for venues currently hosting4.While there was a healthy response to the lower bound scenarios,we find decreasing returns(or an inelastic response)to rises in the level of offsets in

50、terms of additional economic activity,i.e.,a doubling of the tax offset level(from 12K to 24K,or from 5%to 10%)lifts GVA by less than half.It is possible to speculate on the reasons for this result.Firstly,venues not currently hosting but willing to do so under the offset have low capacity in terms

51、of patrons.Many of these venues are restaurants,which have lower patron capacity than pubs and clubs.These venues responded strongly to the first and lowest offset scenario,meaning they had limited scope for further increases in additional live music and patronage.In terms of venues hosting before t

52、he pandemic,many venues were likely near capacity after the first and lowest offset in terms of the number of nights they were hosting live music(e.g.they would host music on Thursday,Friday,and/or Saturday),meaning they have limited scope for further increases in live music.Due to the decreasing re

53、turns to rises in the level of offsets,we find the optimal policy specifications are likely to be the lower bound of the policy scenarios studied;the 12K offset for venues not currently hosting and 5%for venues currently hosting.However,the context of this report is also relevant.If the aim is to re

54、-establish a healthy live music ecosystem in the wake of the pandemic,then achieving a revenue positive result(or positive benefit-cost ratio)in the short-term may not be the only(or the primary)objective.Apart from establishing a vibrant cultural in Australias cities and rural centres and enhancing

55、 quality of life,supporting live music may also provide other long-term benefits such as enhancing Australian musical exports and soft power.The proposed initiatives should be viewed with this holistic framework in mind.3 These figures are obtained by multiplying the value of the tax offset received

56、 per venue by the number of venues that indicated they would respond to and therefore apply for the offset.We do not take into account administration,implementation or deadweight costs.4 These figures were calculated by applying a tax multiple of 0.29(the ratio of total taxation revenue to total GVA

57、 pre-pandemic)to the GVA uplifts shown in Figure 3)Economic impact of music industry tax offsets 10 AN OFFSET SCHEME TO ENCOURAGE TOURING WOULD SUPPORT ARTIST DEVELOPMENT BEYOND THE PANDEMIC.The success of the industry ultimately rests on the creative outputs and skills of Australias musicians.Witho

58、ut them there simply would be no live music industry.Musicians were already in a precarious situation pre-pandemic.Beyond creating new content,the cost associated with touring was prohibitive for many aspiring artists.With less investment by record labels,it has become expensive and exhausting for a

59、rtists to achieve and maintain any level of visibility locally,let alone globally.In this context,the dearth of live music over FY20&FY21,and associated collapse in incomes,made musicianship unsustainable for many Australian musicians,with flow on effect for support crew,agents,managers and producer

60、s.Evidence suggests many have left the industry,putting our domestic industry and export market at risk.This has material short term effects.In the longer term,a decline in our cultural exports undermines Australias cultural influence(“soft power”).Discussions with stakeholders indicated that a pote

61、ntial program to address these issues could provide a refundable offset calculated as a share of artists travel expenses.The offset could be limited to releasing artists who play a minimum of 20 shows per year(at least 4 of which are in the regions)and who spend a minimum of$20,000 a year on travel

62、costs.Such a program would have the following benefits:Support visibility both locally and globally Promote both a cultural and economic recovery Encourage artist to re-enter the industry&tour Stimulate regional economies Lift artists incomes Support music exports Support for venues and artists is a

63、bout more than dollars and cents.Music enriches our communities and supports our wellbeing.It can foster a sense of belonging and identity.Live music offers a way to re-build social connections lost during the pandemic and develop new ones into the future.Our stages facilitate cultural expression an

64、d celebrations of diversity and our musical exports allow other countries to share in it.Given these links the revival of live music is not just an economic imperative,but a social and cultural one too.Supporting the ecosystem of vibrant venues and emerging artists flourish will add to the fabric an

65、d richness of Australian life.Economic impact of music industry tax offsets 11 1.INTRODUCTION 1.1 BACKGROUND 1.1.1 Australias music eco-system Australian contemporary music ecosystem is a complex network of people and organisations(see Box 1.1).Contemporary music describes music that is currently be

66、ing written,recorded,and performed by Australians.The contemporary music industry is genre agnostic and encompasses the creation,recording and performance off all current musical forms,from art music through to jazz,hip hop,rock,pop and culturally and linguistically diverse(CaLD).The key players in

67、Australias contemporary music eco-system include the musicians,songwriters,and producers who create music,music publishers and record labels,audio and video streaming platforms,community and commercial television and radio broadcasters,background music services,and the thousands of venues,festivals

68、and events where music is performed live.While there are a small number of large multinational music companies,the live music industry is characterised by many small and micro businesses.Figure 5 provides a simplified view of the contemporary music eco-system,with the direction of the arrows represe

69、nting the flow of funds.Fig.5.A simple diagram of the eco-system Over 5,000 unique venues hosted live music in 2018-19 Economic impact of music industry tax offsets 12 BOX 1.1 THE KEY STAKEHOLDER GROUPS Audience:Most Australians consume music in some form,directly or indirectly.There are a multitude

70、 of ways that listeners can get their fix.Listeners can attend a venue to see a live show,purchase a record,listen to the radio,or stream music through online platforms.Music Creators:Music creators are those who write and/or record and/or perform music and can range from hobbyist to professional.Th

71、e number of music creators varies depending on its definition.In 2016 there were an estimated 15,400 professional musicians and 1,700 composers in Australia5.Performers,songwriters and composers can generate revenue through live performance or through the sale of their recorded music.Venues:in FY19

72、there were around 5,200 hospitality venues licensed to present live music.These venues range from large,ticketed venues dedicated to live performances,to small pubs and clubs where live music is a secondary offering.Venues generate revenues through ticket/cover charges,as well as increased food and

73、beverage sales from attracting patrons to the venue.Performances often involve a promoter who organises performances and pay venues and artists through ticketed revenues.Sound recording owners:Some artists produce and own their sound recordings independently,but others enter record deals with labels

74、 to produce,market and sell their music in exchange for royalties.In Australia,and elsewhere in the world,the recorded music market is dominated by a few major labels6.The independent sector(defined as all music recording businesses other than the major labels)is made up of hundreds of businesses.Pu

75、blishers:Music publisher are responsible for developing the career of songwriters and composers and ensuring they receive payment for the commercial use and exploitation of their works.APRA AMCOS,PPCA and OneMusic Australia:In Australia APRA AMCOS(Australasian Performing Right Association and Austra

76、lasian Mechanical Copyright Owners Society)provide licences to play,perform,copy,and record or make available members music.There are over 110,000 members based in Australia and overseas.They negotiate licence agreements with parties who use copyrighted music publicly(e.g.venues,radio and television

77、 broadcasters,shopping centres)and collect and allocate royalties to members.OneMusic Australia is a joint initiative between APRA,which represents songwriters,composers,music publishers,and Phonographic Performance Company of Australia Ltd(PPCA)which represents record labels and Australian recordin

78、g artists.5 Australia Council,Making Art Work:An Economic Study of Professional Artists in Australia.(2017)6 Deloitte Access Economics,AIR Share Report.(2017)Economic impact of music industry tax offsets 13 1.1.2 The size of the live music industry Prior to the COVID-19 pandemic the contemporary mus

79、ic industry generated billions of dollars in revenue each year.Estimates of the size and employment of the pre-pandemic contemporary music industry vary depending on the methodology used and what types of activity is included(e.g.,some studies taking into account festivals and events,while others in

80、clude only venue based live music,as in this study see figure 6)Fig.6.The economic size of the live music industry pre pandemic7 What was included in the estimates Direct Revenue Source Australias venue based live music,including ancillary patron spending$1.7bn Ernst&Young(2020)Australias total live

81、 music industry,(including festivals,concerts&stadium shows)ancillary patron spending and travel$5.0bn University of Tasmania(2015)Victorias venue based live music industry,including merchandise&ancillary patron spending$511m Deloitte Access Economics(2011)Melbournes venues,concerts,and festivals,in

82、cluding ancillary patron spending$1.4bn Melbourne Live Music Census(2017)Australian contemporary music ticket revenues8$994m Live Performance Australia(2019)Context of this report The COVID-19 pandemic shrunk the Australian economy.The music industry was,and remains,among the worst-affected industri

83、es.Lockdowns and public health orders meant that live performances could not occur.Beyond lockdowns social distancing requirements and capacity constraints continued to hamper live music.Over 2020 and 2021 an estimated 30,000 gigs were cancelled9.APRA AMCOS has commissioned BIS Oxford Economics to e

84、xamine the situation facing the industry,consult with key stakeholders and to determine whether measures such as tax offsets specially could assist venues and artists in 7 Estimates are in the current dollar of year of release,unadjusted for inflation 8 Conservative estimate given results excludes m

85、any pub and club venues that self-ticket,or use ticketing companies not captured in survey 9 I Lost My Gig Australia.(2021)Economic impact of music industry tax offsets 14 recovering from the effects of the pandemic.Accordingly,a survey of music venues by APRA AMCOS and BIS Oxford Economics was cond

86、ucted in November 2021(“the venue survey”).The venue survey was aimed at determining the impact of the COVID-19 pandemic on the industry,developing updated data on industry finances,and determining the effects of policy initiatives such as tax offsets10.This was used to help model the quantitative i

87、mpacts of tax offsets on revenues,Gross Value Added(GVA)and employment11.Tax offset options for artists have been analysed at a broader level(i.e.the potential approach to such offsets without formal economic modelling)as the main issue in this case is what measures could best support individual art

88、ists and the music ecosystem rather than aggregate economic impacts.In addition,BIS Oxford Economics consulted with a number of key industry stakeholders as a part of this research,both to understand the context and issues facing the industry and to determine what measures could be of maximum benefi

89、t in supporting it.The results of the venue survey are discussed in greater detail below with responses to the survey detailed in Appendix A12.Of particular note is that the survey indicated the stark effects of the pandemic on the live music scene with the number of music gigs some 70%less in 2020/

90、21(FY21)compared to 2018/19(FY19)levels.The pandemic compounded long term challenges facing music creators and musicians and highlighted the necessity for a multi-faceted portfolio approach to generating a sustainable income.The sheer breadth and volume of music streamed on digital music services re

91、sults in micro per stream royalty payments,meaning that a song needs thousands of aggregated streams to generate any sizeable royalty.This has meant that in the digital age musicians are increasingly reliant upon live performances as a source of income.For many artists live performance has been the

92、primary opportunity in generating a sustainable income,rendered null and void by COVID-19.10 Modelling of the impact of tax offsets on the Australian live music industry has previously been conducted by EY(2016)Investment initiative to cultivate the Australian contemporary music industry.While there

93、 are some similarities,this report has a broader focus,beyond quantification of offsets themselves and takes into account more recent developments.In particular it recognizes the impacts of the COVID-19 pandemic and the fundamental issues it poses for the survival of the musical ecosystem.The afterm

94、ath of the pandemic has posed Australian policymakers with the choice of ensuring that a vibrant music ecosystem survives and restoring Australians quality of life post-COVID,as opposed to purely market-driven measures.11 GVA is a measure similar to Gross Domestic Product(GDP).It is commonly used in

95、 industry analysis,whereas GDP is used at the whole economy level.The main difference between them is the exclusion of taxes on products(such as GST)from GVA,though the quantitative difference is modest.12 The survey was distributed to 19,501 hospitality venues holding APRA AMCOS music licenses.5,16

96、9 of these were licensed for live performances.325 responses were obtained of whom 111 indicated they did not host live music in FY19 while 213 indicated that they did.Changes in the number of performances in the pandemic are based on responses by 162 live music venues.48%of Australians accessed Liv

97、e Music in 2019 Economic impact of music industry tax offsets 15 Live performance is critical for musicians in developing audiences and fanbases that will then go on to experience and purchase music through streaming or downloading.It is a symbiotic relationship reliant on cross-promotion and levera

98、ging the consumer experience.Nearly half of all Australians(48%)accessed Live Music in 201913.Live music supports the hospitality and tourism industry,by attracting patrons to attend and spend.Yet many musicians are pessimistic about the future,there is evidence many are leaving the industry for goo

99、d.Australian venues are a crucial cultural infrastructure that provide musicians with the opportunity to develop their skills and build an audience.The absence of operating venues threatens the continuity of the industry.Without a healthy domestic live music industry,less Australians may release mus

100、ic,less Australian music will be present on streaming services and broadcast on community and commercial radio and television,putting our music export potential at risk.Without policy action Australia is unlikely to become net exporter of music and achieve the ambitious vision set for the industry(s

101、ee Box 1.2)14.BOX 1.2 VISION FOR THE INDUSTRY:AUSTRALIA AS A NET EXPORTER OF MUSIC The international music market is expected to more than double to around US$131 billion by 203015.Over 60%of this market is expected to flow from recorded music(mostly streaming revenue)and 30%from live music.The cont

102、inued expansion in the global market represents a significant export opportunity for Australians.APRA AMCOS emphasise Australian music creators,artists and publishers s have the potential to earn between 5-10%of the global market.Historically,Federal and State Governments have had limited involvemen

103、t in the venue-based live music industry.This changed with the pandemic.State and Federal Governments responded to the economic fallout brought about by pandemic with a number of measures.Support for creative institutions largely flowed to venues through competitive grant schemes(see Box 1.4),which

104、kept many venues afloat.However,one criticism raised by stakeholders is that music related grants were typically distributed to large organisations,events,productions,and festivals.16 However many venues received support through small business grant programs,particularly in New South Wales and Victo

105、ria.13 The Australia Council,Creating Our Future.(2020)14 Chair of the APRA Board,Jenny Morris Addresses National Press Club.(2020)15 Goldman Sachs Music in the Air.(2020)16 Fletcher,Media Release,$20 Million to Support Australias Creative Sector to RISE.(2020)One in seven venues believe theyll neve

106、r host as many gigs they did prior to the pandemic Economic impact of music industry tax offsets 16 Analysis suggests that under 15%of Australias 5,000 plus venues licensed to host live music received a targeted live music grant17(as of March 2021).By their nature competitive grant programs create w

107、inners and losers,rather than buoying the industry as a whole.Many venues that missed out on a grant have had to shut down permanently(see Box 1.3).The venue survey indicates that 13%of Live Music venues that hosted an event in FY19 do not believe they will ever host as many performances as they did

108、 in that year.As COVID-19 becomes endemic,the State and Federal Governments pandemic response grant programs will wind down.Discussions by BIS Oxford Economics with key stakeholders noted that current initiatives will fail to tackle the long-term challenges facing the industry.Previous research has

109、established a strong economic case for further investment in the live music industry18.As indicated,BIS Oxford Economics has been engaged by APRA AMCOS to further investigate the economic case for investing in the industry.Specifically,this report:-estimates the economic impact of tax offset incenti

110、ves for venues to host live music;and-outlines a scenario for targeted artist support.BOX 1.3 THE PERMANENT CLOSURE OF MUSIC VENUES Many long running and iconic venues have closed permanently,and many are on the brink of closing.Permanent closures include the John Curtin Hotel,Giant Dwarf,Venue 505,

111、Mojo,The Newsagency,Caf Lounge,Music at Street Market and the Steyns Moonshine Bar.Many venues that have re-opened after the COVID-19 closures have not returned to presenting live music entertainment.Many commercial property landlords have become pessimistic about the economics of live music tenants

112、.Several have ended leases,seeking more lucrative tenants.A rise in insurance premiums has made it untenable for many venues to remain operating19.Many live music venues have held community fundraisers to raise money to cover debts.These include Crowbar,Lion Arts Factory,Enigma Bar and Jive.17 BIS O

113、xford Economics analysis of Federal and State Grants programs(including RISE,Live Music Australia,NSW Performing Arts Relaunch Package,Queensland,Victorian,West and South Australian Live Music Support programs/grants,City of Sydney Live music grants,as well as other state-based grant programs).Analy

114、sis doesnt include Federal or State COVID-19 Small Business grants,given these are not tied to the provision of live music.18 For example,a 2014 University of Tasmania study revealed that for every$1 invested in the industry by the government,a further$3 makes its way into the broader economy 19 Hob

115、son,Rising Premiums the“last Nail in the Coffin”for Live Music Venues.(2022)Economic impact of music industry tax offsets 17 BOX 1.4 GOVERNMENT SUPPORT FOR THE VENUE BASED LIVE MUSIC INDUSTRY The bulk of government support for the live music industry,both prior to and throughout the pandemic,has bee

116、n distributed in the form of competitive grants.The centrepiece of the Federal Governments response to the economic fallout of COVID-19 was the$200m Restart Investment to Sustain and Expand(RISE)fund.Over quarter of the RISE grants were awarded to music organisations,festivals,productions,and events

117、.However,a small share of these funds went directly to music venues.State and Federal Governments have also developed programs specifically targeting live music venues.The Federal Governments Live Music Australia initiative provides$20m in grants over the over four years to 2023-2420.The Victorian G

118、overnment supported venues through its Music Works and Live Music Restart package,the NSW Government through its Performing Arts relaunch package,and other State and Territory Governments through similar grants packages.The NSW and Victorian Governments also provided indirect support through voucher

119、 initiatives.The NSW Government additionally funded the Great Southern Nights festival.Two state governments(Victoria&NSW)also adopted insurance,or event saver measures to address gaps in the private market and absence of a Federal Policy.1.2 SCOPE OF THIS REPORT This report quantifies the economic

120、value generated by the venue based live music industry,and how various tax offset scenarios impact this value.This value generated is captured through metrics such as revenue,GVA,employment and indirect economic benefits.In addition,tax offset options for targeted artist support are also explored,al

121、though not formally modelled.1.2.1 More than economics:the social and cultural imperative While useful to policymakers,economic figures only convey part of the value of the industry.Social and cultural values and benefits are especially important particularly in the wake of a pandemic which has torn

122、 at the social fabric of the country and caused significant personal hardship for music workers and musicians.Confirming what many know,a sizable body of research demonstrates that live music creates positive contribution to the community,and benefits flow to non-gig-goers(or non-users)21.Numerous s

123、tudies have linked live music attendance to reduced stress,improved social connection and wellbeing,60%of Australians say the arts have a big or very big impact on our 20 Office for the Arts,Live Music Australia.(2022)21 University of Tasmania,The Economic and Cultural Value of Live Music in Austral

124、ia.(2015)Economic impact of music industry tax offsets 18 sense of wellbeing and happiness22.These improvements can link back to positive economic outcomes.For example,better wellbeing can reduce public health expenditure and lift productivity23.Yet many of the benefits that flow from Australias liv

125、e music ecosystem are distinct from economic values,and,due to their nature,are difficult to quantify.For many Australians,the loss of live music throughout 2020 and 2021 brought home these benefits.They lost a part of what makes life so special,and no number could capture this loss.The musicians th

126、at express themselves on Australian stages create meaning for and enhance the identities of their audiences,as well as themselves24.The live music ecosystem provides the context for Australians to celebrate diversity,provide a sense of belonging and explore what it means to be part of a community.Mu

127、sicians,music workers and fans suffered through the pandemic.Experts are warning that Australia is amidst mental health crisis25.Live performances provide an opportunity for many to rebuild social connections that may have been lost during the pandemic.Qualitative and quantitative evidence shows mus

128、ic is often a therapeutic experience,a fact recently highlighted in several submissions to the Productivity Commission inquiry into mental health26.Revitalising the live music industry is a key avenue Government can adopt to nurture the mental health of artists and wider public.More than that,a vibr

129、ant music ecosystem is the platform for Australian acts to go global.Domestic touring is how Australian artists“cut their teeth”and get invaluable experience which they can then bring to the global stage.This not only brings in export dollars but enhances Australias cultural appeal its“soft power”.E

130、merging from a time when Australia has been cut off from the word for an extended period this is especially important.Recognising these links in the wake of a pandemic is vital.Restoring Australias musical ecosystem-with its social and mental health benefits as well as its domestic economic and expo

131、rt effects should be a key government aim.The structure of this report is as follows:Section 2 unpacks the challenges facing the industry Section 3 discusses modelling the impact of venue tax offsets Section 4 outlines the economic analysis.Section 5 sketches a proposal to support artists beyond the

132、 pandemic 22 The Australia Council,Creating Our Future.(2020)23 Isham,Mair,and Jackson,Wellbeing and Productivity.(2019)24 Van der Hoeven and Hitters,The Social and Cultural Values of Live Music.(2019)25 Sydney Morning Herald,Young peoples mental health crisis must be addressed(2022)26 Department of

133、 Communications and the Arts,Response to Productivity Commission Issues Paper.(2019)60%of Australians say the arts have a big or very big impact on our sense of wellbeing Economic impact of music industry tax offsets 19 2.CHALLENGES FACING MUSICIANS AND VENUES The challenges facing the industry fall

134、 into two distinct categories:the immediate and ongoing impacts of the COVID-19 pandemic.These include restrictions on operations and supressed demand for live music,and are outlined further in section 2.1,and longer term trends impacting musicians and venues.These include digitization,low pay rates

135、 per stream,cost of living for artists and regulatory and financial barriers for venues and are outlined further in section 2.2.2.1 PANDEMIC SPECIFIC CHALLENGES The pandemic compounded structural challenges impacting venues and exposed the precarious position of musicians.During FY19,FY20 and FY21 n

136、umerous State public health orders prevented venues from opening their doors.Tens of thousands of gigs were cancelled.A variety of sources indicate a substantial collapse in activity:An Australian Live Music Business Council survey in late 2020 found three quarters of venues reporting a revenue down

137、turn of over 75%in the past six months.Live Performances Ticket Attendance&Revenue Report showed contemporary music experienced a decline of 63%in revenue and 65%in attendance between 2019 and 2020.I Lost My Gig survey data revealed 23,000 gigs and events were cancelled,equating to nearly$64m of los

138、t income since July 1st 2021 or$16m per week.As indicated,venue survey work undertaken by BIS Oxford Economics in collaboration with APRA AMCOS,confirms these findings.Responses suggest that in FY19 around 425,000 gigs were hosted at venues across the nation.This number dropped to around 265,000 in

139、2019/20 and fell again to 122,000 in 2020/21.The number of gigs held in 2020/21 was therefore 70%lower than the number held in FY19.The number of gigs held in FY21 was 70%lower than the number held in FY19 Economic impact of music industry tax offsets 20 Fig.7.Decline in venue-based performances FY1

140、9-FY21 Musicians were among the most affected Australian workers:Prior to the pandemic there were an estimated 15,000 professional musicians practicing in Australia.With the impact of the pandemic,many musicians experienced significant drops in their income and became reliant on government income su

141、pport.Many accessed their savings,and what little they had in superannuation.Some pivoted towards online strategies to replace lost income sources,yet there is little evidence that these strategies were effective in doing so.Surveys of musicians suggest over 60%experienced a period of(official)unemp

142、loyment in 202027.Whats more,health orders impacted the hospitality and education sectors,which are important sources of secondary income for musicians28.The collapse in live music could have long-term impacts:According to the venue survey,1 in 7 venues indicated they would never host as many gigs a

143、s they did prior to the pandemic,indicating the pandemic will have a lasting impact.Smaller venues,such as pubs,are crucial for the development of new artists,a place where emerging musicians refine their craft and gain experience.Musicians are pessimistic about the future:Sentiment about future inc

144、ome and employment opportunities returning in 2022 and beyond is negative among musicians27.Evidence suggests that many musicians are turning away from the industry for good29.A survey of musicians in Victoria conducted in July 27 Crosby and McKenzie,Survey Evidence on the Impact of COVID-19 on Aust

145、ralian Musicians and Implications for Policy.(2021)28 Australia Council,Making Art Work:An Economic Study of Professional Artists in Australia.(2017)29 The Guardian,“It Just Feels Safer”:The Australian Musicians Pivoting from an Industry in Crisis.(2021)-100,000 200,000 300,000 400,0002018/192019/20

146、2020/21Total gigsSource:BIS Oxford Economic,n=16260%of musicians experienced a period of(official)unemployment in 2020 Economic impact of music industry tax offsets 21 and August of 2020 revealed 58%of respondents were considering leaving the industry30.This was prior to the Delta and Omicron waves.

147、The absence of live music has taken a toll on mental health.For most musicians their artistic practice is highly ingrained in their identity.The cancellation of tours,gigs,and contracts often happened overnight and without warning.63%of Australias performing artists reported worsening mental health

148、during the pandemic31.Less musicians could mean less music exports.Without policy action the COVID-19 pandemic is likely to have a long-term impact upon the supply of Australian musicians,along with the music they record and perform.This could have a bearing on our long-term music exports and our cu

149、ltural influence(soft power).Future variants and the lack of federal insurance creates uncertainty.Ongoing waves of new variants have wreaked havoc on those planning gigs and events.Even after the Omicron wave,some medical experts have warned that new variants are a question of“when not if”.New wave

150、s of infection heighten the risk of cancellation and create uncertainty for those aiming the rebuild the live music ecosystem,while disparities in State public health orders make planning and touring challenging.The lack of a Federal insurance scheme compounds the risks and uncertainties,leaving man

151、y without the confidence to invest and plan new gigs and events.BOX 2.1 THE NEED FOR A NATIONAL INTERRUPTION OR INSURANCE FUND Many music planners lack the confidence to commit time and money to gigs and events that could be cancelled due to COVID-19 health orders.European governments recognise the

152、risks of reactivating events.For Example,the German government has committed 2.5 billion(approximately$A3.9 billion)to tackle the issue of COVID-19 related cancellations.Similar packages have been enacted in several other nations.A national approach is needed if the live music and entertainment indu

153、stry is required to buoy Australias live performance industry through future waves and provide planners with confidence to kickstart the industry.Both Live Performance Australia and APRA AMCOS have called for a joint Federal/State scheme to tackle the issue and assist in providing certainty for the

154、market.30 Fabian Cannizzo and Catherine Strong,Understanding Challenges to the Victorian Music Industry during COVID-19.(2020)31 Rusak,63.5%of Australias Performing Artists Reported Worsening Mental Health during COVID.(2020)Survey data suggests half of musicians were considering leaving the industr

155、y during the pandemic Economic impact of music industry tax offsets 22 2.2 LONG TERM CHALLENGES FACING MUSICIANS Digitisation&new platforms:Over the first decade of the 21st century illegal peer-to-peer file sharing decimated music industry revenues.Global and Australian recorded music revenues more

156、 than halved32.More recently streaming platforms,such as Spotify and Apple Music,have grown to become the dominant means of listening to music and have supported a rebound in recorded music revenues.Over 12.7 million Australians(61%)now use a music streaming service33.The arrival and rapid growth of

157、 social media and subscription video on demand services has facilitated new income streams for music creators.More recently the emergence of platforms such as TikTok,online fitness and digital games provide new areas of growth in both the licensing and commissioning of music.An explosion of competin

158、g content:The cost of producing,promoting,and distributing new music fell sharply with digitisation.Lower barriers to entry resulted in a rise in the supply of music and music availability was no longer constrained by the stocking constraints associated with physical formats-no matter how niche or o

159、bscure a record the endless shelf space of digital platforms provides room.This is good news in one sense given success has become less concentrated around superstars-at the peak of the CD era the top 50 artists accounted for 25%of sales,on Spotify the top 50 artist account for just 12%of streams34.

160、However,these factors have resulted in an explosion of competing content-around 60,000 songs are released onto Spotify every day-meaning aspiring artist must compete with an ever-increasing number of releasing musicians.Most never make it big-96%of artists with music on Spotify have less than 10,000

161、 monthly listeners34.Low pay per stream:Low streaming remuneration compounds the intense competition in the industry.Spotify and Apple music pay out around US$0.003 and US$0.008 US per stream respectively35.This means that only artists with a significant number of streams make a living from their st

162、reaming pay-out.For most their creative outputs will never be more than a side hustle only 0.3%of all artists on Spotify generated$50,000 in total royalties to rights holders in 202034.Competition from international acts:Australia is a net importer of music-meaning we listen and pay more to internat

163、ional acts,mostly American,than,oversees listeners listen and pay to Australian artists.Typically,less than a third 32 IFPI,IFPI Global Music Report 2021.33 12.7 million Australians Use Streaming Music Services.(2021)34 Spotify,Loud and Clear by Spotify.(2021)35 Digital Music News,How Much Do Artist

164、s Make Per Stream?(2021)96%of artists on Spotify have less than 10,000 monthly listeners Prior to the pandemic 50-75%of musician incomes were sourced from live performances Economic impact of music industry tax offsets 23 of the top 100 weekly songs sold or streamed in Australia are releases from Au

165、stralian acts36.Contractual arrangements,unstable incomes:Musicianship is the original gig economy.A large share of workers in the arts and cultural sectors earn most of their income though short-term and often informal contracts.In 2016 only 12%had a salary or wage-the majority were self-employed37

166、.Reliance on live performances for income:Low streaming remuneration has meant musicians are increasingly dependent on live performances as a source of revenue38.Apart from providing invaluable experience for emerging artists themselves,live performances represent an experience for audiences that ca

167、nnot be easily replicated.Accordingly(and perhaps ironically in a world increasingly focussed on online activity),they command a premium in terms of prices and revenues.Surveys have shown that close to three quarters of musicians incomes come from live performances39.For an exporting musician live p

168、erformance contributes around half of total income40.This fact made musicians vulnerable to large declines in income during the COVID-19 lockdowns.Overall,the average musician earns very little:Even after supplementing recorded music sales with income from live performance,a professional musicians c

169、reative income remains meagre,averaging$30,400(in 2015 dollars)41.Less than a quarter earned more than$50,000 in creative income41.A healthy venue-based live music scene is essential to support the incomes of Australias middle class of artists.36 BIS Oxford Economic analysis of Billboard Top 100 cha

170、rts.37 Krueger,Rockonomics.(2019)38 Krueger,Rockonomics.(2019)39 Deloitte Access Economics,The Economic,Social and Cultural Contribution of Venue-Based Live Music in Victoria.(2011)40 Australia Council,Born Global.(2020)41 Australia Council,Making Art Work:An Economic Study of Professional Artists i

171、n Australia.(2017)Less than a quarter of musicians earn more than$50,000 in creative income.Economic impact of music industry tax offsets 24 Fig.8.Musicians incomes in recent decades Most musicians require other sources of income:In the face of unstable work within the traditional gig economy,and hi

172、ghly variable,most musicians are reliant upon other sources of income.A growing share of artist income is earnt from non-creative sources.Gender equality remains an issue:Women represent only one-fifth of songwriters and composers registered with APRA AMCOS,despite making up 45%of qualified musician

173、s and half of those studying music.Female creative artists earn far less than their male counterparts;women also receive less airplay on Australian radio42.2.3 LONG TERM CHALLENGES FACING VENUES A prescriptive regulatory environment:Local,State and Federal regulations govern the live music economy.T

174、he regulations facing local live music venues cover liquor licensing,trading hours,planning and development controls,environmental protection,noise,and sound amenity.To stage live music,there are numerous regulatory hoops venues must jump through.Complex,overlapping,and restrictive regulations can d

175、eter venues from staging live music.Almost half(49%)of live music venues that regulatory reforms would encourage them to host more live music.Additionally close to half of non-live music venues cited restrictive regulations as a key barrier to hosting live music.The relative health of the live music

176、 ecosystems across our major cities can reflect their respective regulatory environments.For example,prior to the pandemic Sydneys lockout regulations were associated with a 40%drop in 42 Skipping a Beat:Assessing the State of Gender Equality in the Australian Music Industry.(2017)$0$20,000$40,000$6

177、0,0001986/871992/932000/012007/082014/15Other sourcesCreative&arts relatedAverage income(2015 dollars)Source:BIS Oxford Economics,Throsby&Petetskaya(2017)Half of venues said regulatory reform would encourage them to host more live music Economic impact of music industry tax offsets 25 live performan

178、ce revenues for venues in the CBD43.Melbourne,on the other hand,is often touted as an example of a jurisdiction with a less prescriptive regulatory environment.NSW has since taken steps to improve the regulatory environment facing live music venues,and the Live Music Office continues to advocate bet

179、ter regulation to unlock the value of live music across jurisdictions.Venues have different motivations for and expertise in hosting live music:Some venues indicated they made a direct profit from hosting music(i.e.ticket or cover charge revenue more than compensated for hosting costs,such as musici

180、an fees).However,for many venues,music acts as a loss leader.These venues do not recover the full costs of hosting the live music directly through patrons(e.g.,through tickets),but indirectly through additional patron expenditure on food and beverages.For these venues live music is an essential part

181、 of their business model,it can create a point of difference and add to the venues brand.However previous research highlighted a lack of understanding and expertise around the underlying economics of hosting music44.The pandemic added to the complexities of hosting live music.For many venues it was

182、not commercially viable to resume gigs under physical distancing requirements.Venues face new barriers,such as higher insurance premiums,and uncertainty around future variants.Fig.9.Venue motivations for hosting live music 43 Live Music Office,Sydney CBD Sees Drop in Live Performance Revenue since I

183、ntroduction of Lockout Laws.44 Ernest&Young Investment initiative to cultivate the Australian contemporary music industry(2016)I made a profit on hosting live music after paying the expenses of the band/act.Made a profit on both live music itself and the food/drinks etc.during live performances.Made

184、 a loss on hosting the live music but ended up making more money overall due to spending on F&BI like live music regardless of the profit/loss36%13%15%36%Source:BIS Oxford Economics,n=162Economic impact of music industry tax offsets 26 2.4 POTENTIAL ACTION AREAS Tackling the challenges above will in

185、volve a broad suite of policy measures that recognise the interrelated revenue channels for music creators and artists.Such measures could include:Supporting local content on online media through local content requirements and incentives Artist fellowships,incubator programs,&living wage subsidies I

186、nnovative investment and consumption programs,such as vouchers and rebates Continued reforms to the regulations facing venues A national cultural plan to set a vision for the industry As a part of the venue survey,venues that hosted live music in FY19 were asked of the factors that would encourage t

187、hem to stage more live music performances(figure 10).The most popular response was more government grants,followed by a reduction in the overall costs to stage live music.While grants can support venues over the short run,particularly through COVID-19 related closures,this report seeks to unpack lon

188、ger term solutions to the challenges faced by musicians and venues.Exploring all possible options is beyond the scope of this report.Stakeholders noted that while grant programs have been supportive,there is often a limited pool of funds meaning they are competitive in nature.Many stakeholders are k

189、een to see long-term and non-competitive solutions and identified tax offsets as a potential policy option.Annual tax offsets for venues staging live music could reduce the overall cost of staging live music and incentivise further investment in live music over the long run.Half of venues agreed a r

190、eduction in the overall costs to stage music would encourage them to host more Economic impact of music industry tax offsets 27 Fig.10.Factors that encourage venues to host more live music BOX 2.2 BODIES TACKLING MUSIC INDUSTRY CHALLENGES The Live Music Office(LMO)identifies and advocates for better

191、 policy,regulation and strategy for the Australian live music sector across state and territory governments.APRA AMCOS established the LMO in 2013 and provides operational funding.Some project related funding has been provided by Federal,State and Local governments and councils.APRA AMCOS directly s

192、upports the work of the Live Music Office,Sounds Australia and National Aboriginal and Torres Strait Islander Music Office(NATSIMO).APRA represents over 110,000 songwriter,composer,publisher members and licenses more than 112,000 businesses.APRA AMCOS collaborates on advocacy and policy development

193、with key organisations across the contemporary music industry.Sounds Australia Established in 2009,Sounds Australia is a centralised,whole-of-industry initiative,activating the worlds best networking,performance and business-matching opportunities for export-ready Australian artists and music busine

194、sses.Sounds Australia is a joint partnership between the Australia Council for the Arts,APRA AMCOS,the Australian Government,ARIA,the PPCA and state government agencies.Sounds Australia fuels the growth of the Australian music industry,connecting small businesses to global opportunities,contributes

195、to arts excellence and innovation,seeds economic prosperity and job creation for the sector and contributes to cultural identity.Support Act is the music industrys charity,delivering crisis relief services to artists,artist managers,crew and music workers across all genres who are unable to work due

196、 to ill health,injury,a mental health problem or some other crisis,such as COVID-19.The Australia Council runs several programs that support contemporary music including the Contemporary Music Touring Program(CMTP).0%20%40%60%There arent any barriersDont knowNothingGreater availability of artistsLes

197、s bureaucracy(red tape)More certainty about future demandA reduction in the cost of artistsChanges in the regulatory environmentGreater support from local government,or lower ratesA reduction in the overall cost to stage live musicGreater government grantsSource:BIS Oxford Economics,n=92 Share of ve

198、nues that agreedEconomic impact of music industry tax offsets 28 Australian Recording Industry Association(ARIA)is the national industry association representing major and independent record producers,manufacturers and distributors.Phonographic Performance Company of Australia(PPCA)is a non-profit c

199、opyright collecting society that provides blanket licences for the use of recorded music in Australia.OneMusic Australia is a joint initiative between APRA AMCOS and PPCA to issue joint music licences to businesses who use music.Live Performance Australia(LPA)is the peak body for Australias live per

200、formance industry Australia Live Music Business Council(ALMBC)is the newly formed national music industry association led by Australian business owners.State based music bodies-Music Victoria,MusicNSW,West Australia Music(WAM),QMusic,Music NT,Music Tasmania,Music SA and Music ACT as well as the Vict

201、orian and South Australian Music Development Offices support artist development,distribute grants and fund music events.BOX 2.3 TAX INCENTIVE SCHEMES FOR CULTURAL INDUSTRIES Several nations have tax incentives that support the creative industries:EU VAT Exceptions-artists and their work can be class

202、ified in a list of basic necessities,which may completely shield them from VAT or only apply a low rate for VAT.Record in Iceland initiative involves a rebate of 25%of recording expenses.Eligible expenses include travel and accommodation costs,and studio fees.Eligibility also requires that the recor

203、ding be no longer than 30 minutes and be released no more than 18 months after the sessions.UK Orchestra Tax Relief(OTR)scheme-provides a tax deduction of 100%of enhanceable expenditure;or if a loss is surrendered,25%of the loss up to the amount of enhanceable expenditure.Irish tax offset for artist

204、s-the first 50,000 in profits or gains per year earned by writers,composers,visual artists and sculptors from the sale of their work is exempt from income tax in Ireland under certain circumstances.American theatre tax incentives-Illinois,Louisiana,New York State,and Rhode Island provide 20%-35%tax

205、credits for qualifying expenditure by production companies.Australian film and TV offset scheme-feature films are eligible for a 40%rebate of qualifying expenditure,and other programs such as TV,miniseries and documentaries are eligible for a 30%rebate.Economic impact of music industry tax offsets 2

206、9 3.TAX OFFSET METHODOLOGY:VENUES As indicated above,the COVID-19 pandemic and longer-term changes have posed a serious threat to the Australian live music industry.One policy response to this is the development of a refundable tax offset to venues as a financial aid to encourage venues to hold more

207、 live music events(see box 3.1 for an explanation of a refundable tax offset).The concept of a tax offset for live music for venues was first explored by EY in 201645.While this report has a broader focus,it also estimates and provides an update of these figures using a revised methodology and updat

208、ed data,and taking into account the changes unleashed by the COVID-19 pandemic.BOX 3.1 REFUNDABLE TAX OFFSETS The terms tax offset,tax rebate and tax credit are synonymous.All these terms refer to a tax concession that directly reduces the tax that a business must pay.The ATO looks at businesses tax

209、able income and works out how much tax is owed,then reduces that amount by the value of the tax offset.For example,if a business pays$20,000 in tax payable at the end of the year,a$2,000 tax offset would directly reduce their tax payable to$18,000(resulting in the final tax payable).Refundable tax o

210、ffsets work as negative income taxes.If an individuals tax liability is zero,any remaining value of the offset will be directly paid to the business as a tax refund.While,as its name suggests a tax offset will involve government foregoing taxes,it can also have a stimulatory economic effect on the i

211、ndustry and the broader economy.Moreover,as indicated above,it will help revive and support the live music industry at a time when its contribution to the fabric of Australian life is under threat.Assisting the live music industry will provide important support to the Australian musical ecosystem as

212、 well providing mental health and social benefits,noted above.Our approach to assessing the economic impact of tax offsets to venues is outlined in figure 11,and each step is described in more detail below.45 EY(2016)Investment Initiative to Cultivate the Australian Contemporary Music Industry.Econo

213、mic impact of music industry tax offsets 30 Fig.11.The modelling approach 3.1 DEFINING KEY MEASURES The key measures used in the tax offset impact analysis include the following:Industry gross output-the market value of goods and services produced by an industry,often measured by industry turnover/r

214、evenue.Industry output is also referred to as gross economic contribution or simply revenue.Industry gross value added(GVA)similar to GDP,the market value of goods and services produced by an industry,after deducting the cost of goods and services used.Industry employment the number of workers direc

215、tly employed by the industry,measured in this study in terms of headcount.All three measures are useful.Industry gross output is a measure of production,while GVA is(like GDP)a measure of wealth generation.Employment can be seen as a measure of how the wealth is distributed,or a benefit in its own r

216、ight,given the material and psychological importance of a having a job.GVA is generally the most accepted indictor used in comparing industry size against others.To assess changes in these economic indicators we use some key venue-level metrics:The number of live performances per year by venue type

217、The average attendance at each performance The average ticket price or cover charge The average patron spend on food and beverages These metrics enabled us to estimate of the size of the industry in FY19.Changes in these metrics allow for estimation of the economic ramifications that stem from tax o

218、ffset incentive scenarios.3.2 DEFINING THE VENUE BASED LIVE MUSIC INDUSTRY Live music can occur at festivals,parks,and venues such as galleries,stadiums,and sporting arenas.However,our analysis is focussed more on locations which are subject of regular live music performances.For the purpose of this

219、 study live music venues are defined as hospitality venues licensed with OneMusic Australia to stage live music events.These fall with one of the following categories:Define key measuresDefine venue-based live music industryOutline tax offset scenariosDefine the base-case&collect dataEconomic analys

220、isEconomic impact of music industry tax offsets 31 hotels/bars restaurants/cafes clubs nightclubs other miscellaneous hospitality venues(“other”)Patrons attending live music performances at these venues are assumed to be customers of the venue based live music industry.These patrons provide the indu

221、stry with a source of funding via their ticket purchases,cover charges or door entry,as well as spending on food and beverages.Additionally,we have examined the potential for venues that currently do not host live music do start doing so in the future.These venues are defined as hospitality venues n

222、ot currently licenced with APRA AMCOS to host live music.3.3 ESTABLISHING THE TAX OFFSET SCENARIOS There could be many variations of tax offset scenarios,the purpose of this report is to demonstrate the potential impacts of a select few scenarios.The tax offset scenarios explored in this report were

223、 developed in collaboration with APRA AMCOS,and are as follows46:Value of tax offset Existing live music venues 5%of expenses 10%of expenses 20%of expenses Non live music venues$12,000$24,000$48,000 3.4 DATA COLLECTION The venue survey was used to assess how venues live music hosting decisions would

224、 change under each scenario.The focus of the study was on hospitality venues(i.e.hotels/bars,clubs,restaurants,cafes,nightclubs and other hospitality venues).Accordingly,the venue survey was designed in collaboration with APRA AMCOS,who hold a database indicating venues holding musical performance l

225、icenses(“the APRA database”).The survey was distributed to over 19,461 hospitality venues in the APRA database over a four-week period in November 2021.325 responses were received,with representation from all states.46 These are similar to the scenarios estimated in EY(2016)Investment initiative to

226、cultivate the Australian contemporary music industry.However note that our model(and modelling approach)varies somewhat from the EY approach and uses a variety of different or updated data sources.Economic impact of music industry tax offsets 32 An overview of survey results indicates that:66%(213)o

227、f surveyed venues hosted live music in 2018/19,while 33%(111)did not.A range of venues responded:hotels/bars(42%),restaurants(23%),clubs(21%),nightclubs(2%)and other(14%).Average attendance per gig ranged from 5,000 patrons to 20 patrons.Gigs per venue per annum ranged from 1 to 450.Additional infor

228、mation was also provided by the APRA database.This indicates:The number of hospitality venues in the database for FY19 was 19,501.In FY19,27%of hospitality venues(5,169)were licensed to host live music.51%of these venues were hotels/bars,17%restaurants/cafes,26%clubs,1%nightclubs and 5%other.The rem

229、ainder(14,292)were not licensed to host live music.3.5 DEFINING THE BASE CASE In order to assess the impact of tax offsets they need to be compared to a base case.The base case is essentially“business as usual”.Because of the distortionary effects of the pandemic itself,we have used the 2018-19 fina

230、ncial year(FY19)as the base case reference year(the last normal year before the pandemic.)Combining APRAs database with the venue survey responses helps build the base-case scenario.Fig.12.The venue based live music industry in 2018-19 Venue type Not licensed for live music Licensed for live music A

231、verage gigs/year*(licensed venues)Total annual gigs Hotel/bar 3,049 2,635 108 285,370 Restaurant/cafe 8,178 902 38 33,910 Club 1,490 1,350 53 72,200 Nightclub 145 31 175 5,420 Other 1430 251 111 27,900 Total 14,292 5,169 85 424,810 Source:BIS Oxford Economics,APRA AMCOS Figures may not sum to totals

232、 due to rounding*n=162 3.6 ESTIMATING THE ECONOMIC CONTRIBUTION The estimation process involves assessing the economic ramifications of the changing venue behaviour in response to the tax offset incentives.This involves estimating for each tax offset scenario:-how many venues that did not host live

233、music in FY19 would host live music,and if so,how many more performances(gigs)they would put on:27%of hospitality venues hosted live music in FY19 Economic impact of music industry tax offsets 33 -how many more(if any)live music performances would existing live music venues host.A tax offset will ha

234、ve both direct and“flow-on”(Indirect and induced)effects across the economy:Direct effects The offset will encourage venues to hold more live performances.The venue survey indicates that this will encourage increased patronage,with nights on which live music acts performed attracting an average of 1

235、83 attendees per venue as opposed to 124 per venue for non-live nights.Increased patronage,in turn,results in higher food and beverage spending by consumers.Moreover,ticket sales and/or cover charges will also mean consumer spending increases.This increase in consumption spending(some of which flows

236、 to venues,some to artists)represents a direct economic benefit.Flow-on(indirect and induced)effects The direct increase in venue income and expenses produces flows on effect for other parts of the economy.This includes the artists hired to perform as well as food and beverage suppliers and transpor

237、t services,and increased hotel and accommodation expenditure.These service sectors will then increase their own demand for goods and services in response.These are known as supply chain or indirect effects.In addition,venue staff will use their wages to buy other goods and services along with those

238、down the supply chain These are known as consumer or induced effects.The combination of direct,indirect and induced effects is known as the total economic contribution.The total economic contribution represents the full effects of spending across the economy on an industry or initiative.The change i

239、n the contribution also illustrates what would happen across the economy if a particular initiative were introduced(e.g.tax offsets).Figure 13 below provides an indication of the approach to total economic contribution adopted for this study while the accompanying methodology box goes into further d

240、etail on modelled outputs.Economic impact of music industry tax offsets 34 INTRODUCTION TO ECONOMIC CONTRIBUTION ANALYSIS As indicated,a standard economic contribution assessment,uses three channels of economic contribution.Direct effects constitute the first channel of contribution.These reflect th

241、e economic activity generated by spending at the venues themselves which in turns supports venue revenues,profits and staff employment.Indirect effects form the second channel of contribution.These reflect the economic activity generated by the supply chain when venues purchase goods and services(e.

242、g.payments to artists,food and beverage supplies).Induced effects are the third channel of contributions.These capture the economic activity supported by staff and those employed in direct supply chains,spending their wages on goods and services in the economy.The sum of the direct,indirect and indu

243、ced contributions constitutes the total economic contribution.Metrics used to measure economic impacts include:Gross output which is,in effect,gross revenue Employment measured on headcount terms.Gross value added(GVA)GVA is similar to GDP but excluding taxes(less subsidies)on products.GDP in turn i

244、s most easily thought of as the value of the output produced less the value of the inputs used in that outputs production.Direct effects for the base case were calculated based on estimates of ticket/cover charge and food and beverage spending at live music venues.Indirect and induced effects were c

245、alculated using multipliers derived from an input-output(I-O)model developed using Australian Bureau of Statistics(ABS)input-output data47.Employment estimates were using ABS Labour Force data.GVA estimates were likewise constructed based on ABS I-O data.The survey results indicated the number of ad

246、ditional performances that live and current non-live venues would put on under each option.Given that live music performances,on average,attract more patrons(183)than non-live ones(124),impacts for the scenarios were then estimated,based on the increased revenues which would arise from higher patron

247、age under different tax offset options(at both live and current non-live venues).Economic impact estimates were made based on the last pre-pandemic year(FY19)to filter out the distortionary effects of the pandemic itself.47 Australian Bureau of Statistics,Australian National Accounts:Input-Output Ta

248、bles,2018-19,Commonwealth of Australia.Economic impact of music industry tax offsets 35 Fig.13.The channels of economic contribution Economic impact of music industry tax offsets 36 4.ECONOMIC ANALYSIS 4.1 MODELLING RESULTS 4.1.1 The base case The base case was derived from data collected by the ven

249、ue survey.Total patronage is calculated as the product of the total number of performances(or gigs)and average patronage per performance.This is calculated by each venue type(see figure 14 below).Relevant total venue revenue is calculated as the sum of ticket and cover charge revenue and food and be

250、verage revenue.-Total venue based live music industry revenue is estimated to be$2.4bn,-Over 85%of revenue is sourced from food and beverage sales,with the remainder sourced from ticket and cover charges-Over 60%of revenue flows through hotels/bars,25%from clubs,with the remainder from restaurants,c

251、afes,nightclubs,and other venues The base case is calculated based on the total revenue outcome for FY19 of$2.4 billion is indicated below.Fig.14.The venue-based live music industry in FY19 Venue type Total gigs Avg patrons per gig48 Total patrons(millions)Ticket/cover charge revenue49(millions)Food

252、&beverage revenue50(millions)Total revenue(millions)Hotel/bar 285,367 147 41.8$178.0$1,251.2$1,429.2 Restaurant/cafe 33,915 91 3.1$25.6$92.6$118.2 Club 72,196 274 19.7$85.6$590.7$676.3 Nightclub 5,425 254 1.4$9.2$41.2$50.4 Other 27,905 160 4.5$34.1$133.6$167.6 Total 424,807 183 70.5$332.5$2,109.3$2,

253、441.7 Source:APRA AMCOS BIS Oxford Economics analysis,n=148 Note:Individual figures may not precisely sum to totals due to rounding.48 Patronage per performance figures are sourced from venue survey responses.49 Ticket sales and cover charges are sourced from venue survey responses 50 Average patron

254、 spend is calculated as$30 from survey responses 85%of revenue is sourced from food and beverage sales Economic impact of music industry tax offsets 37 Fig.15.Total revenues by venue type and source(%split)4.2 VENUE RESPONSE TO OFFSET INCENTIVES In this analysis venues are split into two categories:

255、-Those that did not host live music in FY19-Those that did host live music in FY19 4.2.1 Venues that did not host live music in FY19 These venues were asked how they would respond if they were offered a refundable tax offset of$12,000(12K),$24,000(24K)and$48,000(48K)to host live music.64%of these ve

256、nues stated they would begin hosting live music with a 12K tax offset,and this share rises with the 24K and 48K offset.Unsurprisingly,venues indicated they would host more gigs if the offset were higher.Of those that would host live music,the average number of annual gigs were 17,21&26 under the 12K

257、,24K and 48K scenarios respectively.Of the non-live venues that agreed a tax offset would encourage them to host live music:-40%were hotels/bars,that indicated they would host an average of 19,23 and 27 gigs/year under the 12K,24K and 48K scenarios respectively.-38%were restaurants/cafes,that indict

258、ed they would host an average of 14,19&25 gigs/year under the 12K,24K&48K scenarios respectively.-The remaining 20%were clubs,or other hospitality establishments More than half of industry revenues comes though hotels&bars Food&beverage revenue 86%Average ticket/cover charge 14%Hotel/bar61%Restauran

259、t/cafe4%Club,26%Nightclub2%Other6%Source:BIS Oxford EconomicsEconomic impact of music industry tax offsets 38 Fig.16.Response to tax offset scenarios:Venues not hosting live music 4.2.2 Venues that hosted live music in FY19 Venues that hosted live music in FY19 were asked how they would respond if t

260、hey were offered a refundable tax offset equivalent to 5%,10%and 20%of their annual live music expenses.60%or more of the venues stated they would host additional gigs under each of the offset scenarios.Of those the venues that would host more music,the average number of additional performances were

261、 17,19&24 under the 5%,10%and 20%scenarios,respectively.Of the live music venues that agreed a tax offset would encourage them to host live music:-50%were hotels/bars indicating they hold 20,22&26 additional gigs/year under the respective scenarios.-25%were clubs indicating they hold at least 14,15&

262、19 additional gigs/year under the respective scenarios.-14%were restaurants/caf indicating they hold at least 13,17&22 additional gigs/year under the respective scenarios.No morethancurrent1-5more6-10more11-15more16-20more21-30more31-40more41-50more500102030405060How many more live performances woul

263、d you host annually if you received a refundable tax offset?5 pct10 pct20 pctSource:BIS Oxford Economics,n=140ScenarioNo of venues63%of venues that didnt host live music in FY19 agreed a tax offset would encourage them to host live music Economic impact of music industry tax offsets 39 Fig.17.Respon

264、se to tax offset scenarios:Venues hosting live music Overview of venue responses The rise in the number of venues hosting live music,combined with a rise in the average number of gigs hosted by existing live music venues will boost the number of gigs hosted annually.Figure 18 provides an overview of

265、 the impacts of each tax offset scenario.Unsurprisingly,the larger the tax offset the greater the rise in gigs per year.The 48K scenario produces 230,600 additional live gigs while the 20%scenario(for existing venues)provides 91,900 additional gigs per year.Combining the figures for venues that did

266、not host music in FY19 with those that did provides the aggregate additional performances under a combination of offset scenarios.For example,the combined uptick in gigs/year under both the 12K&5%scenario is around 203,000 additional gigs/year.Multiplying the number of additional gigs by the average

267、 attendance by venue type provides the total number of attendances under each scenario.The increase in gigs per year results in an additional 24 million and 20 million attendance at live gigs under the 48K and 20%offset scenarios respectively(or 44 million collectively).No1-56-1011-1516-2021-3031-40

268、41-50500510152025303540Would a refundable tax offset on the expenses in staging live music encourage you to host live music?12k24k48kSource:BIS Oxford Economics,n=94gigs/yearNo of venuesScenarioEconomic impact of music industry tax offsets 40 Fig.18.An overview of each scenario Venues not hosting li

269、ve music Venues hosting live music Scenario Base 12K 24K 48K 5%10%20%Gigs/year 424,80 575,300 612,500 655,400 477,500 488,900 516,700 Increment-+150,500+187,700+230,600+52,700+64,100+91,900 Attendance/year(millions)70.5 87.2 90.3 94.9 85.1 86.5 90.6 Increment-+16.7+19.8+24.4+14.6+16.0+20.0 Source:BI

270、S Oxford Economics It is worth highlighting that the significant lift in gigs from venues not currently hosting music is dampened by the capacity of these venues.The majoirty of these venues are cafes and restaurants(see figure 12).These venues reported lower capacity on live music nights than other

271、 venues such as pubs and hotels(see figure 20 below).While there was pronounced effect in terms of the number of additonal gigs,these additional gigs do not translate as strongly into the attending patrons as current live music venues.Fig.19.Attendance per year by scenario and venue type(gross)-10 2

272、0 30 40 50 60 70 80 90 100Base case5%10%20%12K24K48KHotel/barClubRestaurant/cafeOtherNightclubAttendance(millions)Source:BIS Oxford Economics,n=148Venues hosting live musicVenues not hosting live musicEconomic impact of music industry tax offsets 41 Some caveats to these figures should be noted howe

273、ver:Gross attendance vs net economic impacts-The additional live performances(and accompanying attendances)discussed above are“gross”in the sense that they represent the additional number of live gigs and accompanying attendees which we estimate the tax offset initiatives would encourage.However,for

274、 the purposes of estimating the true economic contribution we have effectively netted off the number of attendees at non-live events who would attend in any case.As discussed below,we estimate an additional 59 people attend and spend at a venue on a live music night as opposed to non-live night(see

275、figure 20).It is this“incremental growth”figure which has been used in estimating the net change from an economic contribution perspective.Fig.20.Attendance by type of venue and night Night Venue type Live music Non live music Hotel/bar 147 78 Restaurant/cafe 91 63 Club 274 189 Nightclub 254 78 Othe

276、r(please specify)160 192 Total 183 124 Source:BIS Oxford Economics While net figures are important for the economic calculations,gross live performance and attendance figures may be seen as important in broader terms.From the point of view of the music industry and society substituting live for non-

277、live music performances may have a value of its own.That is,we may prefer a thriving live music ecosystem to one in which audiences simply listen to live music at venues.In addition,the existence of a thriving live music scene helps support the existence of recorded music itself.This issue has been

278、raised in the discussion in the preceding chapters.Supply and demand side constraints In practice,venues may have limits on the capacity to which they could accommodate additional gigs.In addition,while patronage has been assumed to match this increase in supply,the extent to which audiences respond

279、 and attend such events(i.e.,demand elasticity)has not been formally modelled in this study.Formal modelling would require additional research.Economic impact of music industry tax offsets 42 Nonetheless,as indicated,to the extent that a net approach has been used to undertake an economic assessment

280、 these factors may be controlled for to some extent as a part of that assessment.That is,live music venues which reported that they experience an increase in a patronage on live music nights implicitly already have some capacity to accommodate additional patrons were they to put on more such nights.

281、In addition,to the extent that both live and non-live venues indicated a willingness to put on more live acts,also this contains some implicit understanding of the ability/feasibility of doing so.This is reflected by proportions of respondents willing/not willing to respond to such incentives.Those

282、not willing to respond,for example,may do so precisely because they do not believe it would be logistically or financially feasible.4.3 DIRECT ECONOMIC IMPACTS 4.3.1 Venue revenues As discussed,survey responses indicated that in FY19 venues reported greater attendance during live music nights(or day

283、s)than non-live nights.Specifically,as indicated in the figure below,venues reported an average of 183 patrons on live music nights when performances took place whereas non-live nights averaged 124 patrons.In other words,one additional live music performance produces a net increase of 59 patrons for

284、 the average venue.Survey data indicated that patrons spend an average of$30 per person at venues on food and beverages on average(regardless of whether they are attending a live or non-live music event).Accordingly,higher patronage at live music events increases this spend.Fig.21.Patronage for live

285、 music vs non-live music nights 050100150200Live music nightNon live music nightSource:BIS Oxford Economics,n=148Average nightly patrons59 additionalpatronsEconomic impact of music industry tax offsets 43 Patrons to live events will also spend on ticket revenue/cover charges in cases where one appli

286、es.Data derived from the survey indicates for venues for all venues the average ticket/cover charge was$11.22 on live music performance occasions.Accordingly,as the tax offset scenarios boost the number of live acts they result in:increased spending on food and beverages due to higher patronage;and

287、increased spending on tickets/cover charges to gain entry to(an increased number of)live events.Combined with the willingness to put on new live performances,indicated above,these effects produce a direct increase in total venue revenue in the event of a tax offset being implemented,as shown in the

288、figure below.Fig.22.Direct venue revenues:Base case and incremental impacts($m)Item Base case($m)Tax offset scenario ($m incremental change to base)Non-live venues Live Venues Scenario Revenue$12K$24K$48K 5%10%20%$2,442+$247+$300+$375+$235+$253+$322 Source:BIS Oxford Economics analysis 4.3.2 Artist

289、incomes Venues typically pay artists through a fixed performance fee,as a share of ticket sales or cover charge,or through a combination of the two.Of those that paid artists,survey data indicates that the average payment in FY19 was$1,100.Fig.23.Split of venue payment types to artists Fixed fee71%F

290、ixed fee and share of ticket sales/cover charge12%Share of ticket sales/cover charge7%Other10%Source:BIS Oxford Economics,n=148Economic impact of music industry tax offsets 44 As venues put on more performances,artist incomes will also rise.The increase in the annual number of gigs boosts the number

291、 of payments to artists and lifts total artist income by between$93 and$168 million depending on the scenario(see figure 24).Changes in artist incomes are incorporated into the changes in venue revenue noted above in the economic modelling.As indicated,a key motivation of the offsets is to encourage

292、 a healthy live performance ecosystem.Providing more opportunities for artists to perform and boosting the overall size of the artist sector itself is a key part of this.It is interesting to note that,based on venues responses,the rise in total artist income is roughly around 40%of the rise in total

293、 venues revenues,meaning that a significant portion of the revenue benefits of live music are being shared with artists51.Fig.24.Increment in artist incomes by scenario Source:BIS Oxford Economics,n=143 51 Although there may have been a bias in venues responses to artist pay,i.e.venues who pay artis

294、ts very little,or not at all,may be less likely to respond to the question.$93$103$126$112$136$168$0$20$40$60$80$100$120$140$160$1805%10%20%12K24K48KIncremental rise($m)Venues hosting live musicVenues not hosting live musicEconomic impact of music industry tax offsets 45 4.4 TOTAL ECONOMIC IMPACTS A

295、s indicated,the direct increase in consumer expenditure on venues(and the accompanying impacts on venue revenues)produces flow on effects for other parts of the economy.With more live performances and greater spending on tickets and food and beverages,more must be spent on inputs(expenses)such as pa

296、yments to artists themselves,as well as food and beverage suppliers and transport services.These will have flow-on effects to the rest of the economy through indirect and induced impacts as described above.Accordingly,the total economic combination of these effects is modelled below for the various

297、tax offset scenarios based on I-O modelling of the changes in venue revenues52.Gross output,GVA and employment contributions increase for all the modelled scenarios.As would be expected the 48K and 20%offset scenarios for non-live and live venues respectively produce the greatest increase in gross o

298、utput,GVA and employment contributions.In particular,a 48K offset to non-live venues would contribute$495 million to GVA and 5,800 jobs,while the corresponding figures for the 20%offset to live venues are$425 million to GVA and 5,000 jobs respectively.The combination of the two would see a$920m impa

299、ct,with 10,800 jobs created.Although the offsets provided to non-live and live venues differed(one being a cash amount the other a percentage)responsiveness to offsets appeared to be greater overall for non-live venues.Also notable is that for live venues the differences in outcomes between the 5%an

300、d 10%scenarios are relatively small,though the 20%scenario produces a much larger relative impact.These economic results in turn reflect the responsiveness of venues to the incentives.It is not clear why this might be the case,although the below suggestions are offered as possibilities:Impacts of th

301、e pandemic itself on live venues As indicated the pandemic has seen a major cut in live performances.While many venues have indicated their intention to return to live performances,13%have indicated they do not intend to put on the same number as 52 We acknowledge that there may also be costs in doi

302、ng so,most notably the cost of offsets themselves and the potential for deadweight loss.Addressing such issues would require more formal modelling which is beyond the scope of this study.However,we note that the pandemic itself has introduced major supply and demand shocks into the live music and ar

303、tistic sectors,producing major distortions into the normal functioning of such markets and accompanying negative externalities.As indicated,in some cases,this has led some venues to indicate they will permanently reduce the amount of live music performances they put on while others suggest only a gr

304、adual recovery.These distortions to the supply side are unlikely to have happened,absent the pandemic.Likewise,as indicated,the pandemic has produced major negative externalities through the curtailment of a vibrant live music scene and a reduced quality of life for large parts of the population,wit

305、h negative social and mental health effects.The proposed measures seek to redress these issues.A combined offset adds$920 million to GVA and creates 10,800 jobs Economic impact of music industry tax offsets 46 pre-pandemic.While the offsets are intended to reverse these effects,the results may refle

306、ct the lingering experience of the pandemic.However,given the objective of revitalising the live music industry this might suggest that higher end offsets(i.e.in the 20%range)might be more compelling,given the need to send a strong message of support to the industry.The substantial increase in willi

307、ngness to put on performances(and economic outcomes)between the 10%and 20%scenarios(compared to the difference between the 5%and 10%scenarios)might also be an illustration that industry would respond to a strong signal of intent.Non-live venues seeing an opportunity In contrast to live venues,non-li

308、ve venues may see putting on live acts as an opportunity to revitalise their business after years of hardship and lockdowns.Live performances,boosted by government financial support,could be seen as a new opportunity for such businesses.The large number of non-live venues relative to live venues In

309、the APRA database there are 14,292 hospitality venues that did not host live music in FY19,while there are around 5,169 that did.Scaling the responses up to the population of venues results in a larger impact in terms of additional gigs/year for non-live venues(see figure 12).However,the overall imp

310、act is constrained by the smaller capacity of non-live venues;close to 60%of non-live venues are caf/restaurants which have lower patron capacity than the other venue types.The results can also be disaggregated into direct,flow-on and total effects for each scenario to indicate the contribution of e

311、ach.This is illustrated in the tables below,dealing with gross revenues,GVA and employment respectively.For example,direct industry employment is 23,700 in the base case but rises to 26,800 in the 20%offset scenario.The corresponding figures for total employment(including direct and flow on effects)

312、are roughly 37,700 and 42,700,respectively.Direct incremental effects are also indicated to illustrate how the scenarios would impact on venues themselves.For example,the 20%offset scenario would directly increase direct(i.e.,venue)revenues by$322 million and support an additional 3,100 jobs at venu

313、es.Economic impact of music industry tax offsets 47 Fig.25.Scenario results:Total output incremental to base case Fig.26.Scenario results:GVA incremental to base case Fig.27.Sceanrio results:Employment incremental to base case 673 819 1,022 639 688 877 102004006008001,0001,200$12K$24K$48K5%10%20%Sou

314、rce:BIS Oxford Economics$mVenues staging live musicVenues not staging live music326 397 495 310 333 425 10200400600$12K$24K$48K5%10%20%Source:BIS Oxford Economics$mVenues staging live musicVenues not staging live music3,814 4,643 5,800 3,626 3,903 5,000 101,0002,0003,0004,0005,0006,0007,000$12K$24K$

315、48K5%10%20%Source:BIS Oxford Economics$mVenues staging live musicVenues not staging live musicEconomic impact of music industry tax offsets 48 Fig.28.Scenario results:breakup of gross revenue effects Item Base case($m)Tax offset scenario effect(total$m)Scenario/effect Non-live venues Live Venues 12K

316、 24K 48K 5%10%20%Direct 2,442 2,689 2,742 2,817 2,676 2,694 2,764 Flow-on(indirect and induced)4,412 4638 4730 4,859 4,617 4,648 4,767 Total 6,654 7,326 7,472 7,675 7,293 7,342 7,531 Incremental to base case(direct)247 300 375 234 252 322 Source:BIS Oxford Economics analysis Fig.29.Scenario results:

317、breakup of GVA effects Item Base case($m)Tax offset scenario effect(total$m)Scenario/effect Non-live venues Live Venues 12K 24K 48K 5%10%20%Direct 1,134 1,249 1,273 2,308 1,243 1,251 1,283 Flow-on(indirect and induced)2,088 2,299 2,345 2,409 2,289 2,304 2,364 Total 3,222 3,548 3,619 3,717 3,532 3,55

318、5 3,647 Incremental to base case(direct)115 139 1,174 109 117 149 Source:BIS Oxford Economics analysis Fig.30.Scenario results:breakup of employment effects Item Base case(employees)Tax offset scenario effect(employees)Scenario/effect Non-live venues Live Venues 12K 24K 48K 5%10%20%Direct 23,700 26,

319、100 26,600 27,300 25,900 26,100 26,800 Flow-on(indirect and induced)14,100 15,500 15,800 16,200 15,400 15,500 15,500 Total 37,700 41,500 42,400 43,500 41,400 41,600 42,700 Incremental to base case(direct)2,400 2,900 3,600 2,200 2,400 3,100 Source:BIS Oxford Economics analysis Economic impact of musi

320、c industry tax offsets 49 4.5 IMPLEMENTATION It is acknowledged that implementing new legislation can be burdensome.Annual administration,ongoing monitoring and evaluation can also be costly.However as noted above,such costs should be seen in the context of the distortions introduced to markets by t

321、he pandemic itself and the need to redress these in some of the most affected sectors such as live music performances.However,in the case of tax offsets,there is a good opportunity to leverage existing frameworks and legislation.One precedent is the R&D tax offset scheme administered by the ATO.The

322、proposed scheme also has parallels to existing film industry offset schemes.One framework would see the scheme administered by the ATO,with the assistance of a music body or authority to determine qualifying expenditure.As indicated,the scope of this project does not extend to a detailed analysis of

323、 the costs of implementation.Accordingly,the design of the scheme will require further research and analysis and further stakeholder consultation before it is enacted.Economic impact of music industry tax offsets 50 5.SUPPORTING ARTISTS BEYOND THE PANDEMIC 5.1 BACKGROUND While our network of venues

324、is the infrastructure that facilitates live music,ultimately the health of the industry rests on the creative outputs and skills of our musicians,songwriters,and artists.Without them there simply would be no live music industry.As discussed in section 2,the pandemic compounded challenges already fac

325、ed by musicians,including low streaming remuneration,winner-take-all outcomes and unstable work.Over FY19 and FY20 many professional musicians left the industry and less entered.53 Prior to the pandemic Australias music exports were increasing and delivering substantial economic and cultural benefit

326、s to the nation(see Box 5.1).However,the impact of the pandemic threatens Australias future music export market.Without support Australian artists may fail to take advantage of the continued growth in the international streaming market.BOX 5.1 AUSTRALIAS MUSIC EXPORTS Sounds Australias Born Global54

327、 report highlights that Australia is in the top ten music markets in the world.The report also finds that:international royalty revenue has doubled since 2013,growing to$43.7m in 2018,annual export income of Australian artists,music publishers and record labels are estimated at$195m in 2018,In 2021

328、when the US and UK opened up ahead of Australia,a number of prominent Australia acts were needing to leave the country in order to realise significant touring and festival appearances.Sounds Australia calculated this amount,of just over$80m(which does not include merchandise,spikes in album download

329、s and digital streams,or broadcast and performance royalties,which is substantial additional revenue).Sounds Australia also emphasise t that exporting artists share Australian stories,culture,and perspectives with the world,helping to build national identity and contributing to cultural diplomacy an

330、d Australias reputation on the world stage.53 See for example https:/.au/culture/music/they-will-go-into-different-careers-fears-for-lost-generation-of-musos-20211014-p58zwc.html 54 The Australia Council,Born Global.(2019)Economic impact of music industry tax offsets 51 While the Federal government

331、has a number of programs through which it supports musicians(see Box 5.2),stakeholders noted that many of the current programs are competitive,meaning they can create winners and losers(those that receive the grants and those that dont).Grants are only awarded to a small subset of artists each year.

332、Musicians have also noted that the sheer number of Federal&State grant programs can be confusing,with criteria and eligibility changing from year-to-year.Applicants can suffer from grant fatigue.Additionally,grants often form part of non-recurrent government expenditure,meaning that funding can end,

333、creating uncertainty for artists.Stakeholders supported the case for an inclusive,non-competitive support program that would reach a broad range of artists,from middle-class emerging artists seeking to build a fanbase to established acts seeking to export their music overseas.Musicians and managers noted that a long-term and streamlined program would provide them with more confidence invest in tou