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Government spending on culture - article

Key Statistics - article, July 2000, p.7

Government spending on culture 1990-19991

This article examines the amounts spent on culture through the 1990s by central and local government. It also includes estimates of the contribution of cultural goods and services to New Zealand’s total economic production (GDP).

Cultural spending is defined as funding of: taonga tuku iho (Mäori cultural activities), heritage, library services, literature, performing arts, visual arts, film and video, broadcasting, and community and government activities, which are categories in the New Zealand Framework for Cultural Statistics.

Introduction 

Government spending on culture aims to enhance access to cultural goods and services. While central government focuses on national priorities, local government aims to meet the needs of residents in each local district.

Central government

Central government disburses cultural funding in three different ways. It does so through Vote appropriations funded through general taxation, through NZ On Air, which was funded up to June 2000 by the broadcasting fee, and through the New Zealand Lottery Grants Board, which is funded by profits from the New Zealand Lotteries Commission.

Total public expenditure on culture was $598 million in 1998/99. Almost three-quarters of this expenditure (71 percent) was through Vote appropriations, 20 percent was through NZ On Air and the remaining 9 percent was through the New Zealand Lottery Grants Board. This allocation of expenditure was typical of the 1990s (see Figure 1).

 fig1

Figure 1 shows how total public expenditure on culture rose through the 1990s. The increase was reasonably consistent through the decade, except in the years 1993/94 and 1994/95 when spending rose at an above-average rate. This was the result of increased spending through Vote appropriations.

When examining spending over time, it is important to account for the effect of price changes. This is done by ‘deflating’ the figures (ie, determining what spending would have been if prices had remained constant). At constant 1990/91 prices, total public expenditure on culture was 39 percent higher in 1998/99 than in 1990/91, indicating that the Government spent more on cultural goods and services at the end of the decade than at the beginning.

Vote appropriations

Cultural expenditure through Vote appropriations made up 0.8 percent of the Government’s total spending at the beginning of the 1990s. It reached a high of 1.3 percent in 1994/95, then reduced slightly each year to 1.2 percent in 1998/99.

The Government spreads its cultural spending across a number of different portfolios, with allocations split between capital expenditure (investments in capital projects) and operational expenditure (the purchase of cultural outputs).

Capital expenditure

Through the 1990s, the Government invested capital in cultural projects across seven portfolios. Cultural capital expenditure rose from $3.9 million at the beginning of the decade to a peak of $98.3 million in 1995/96, and was a modest $13.9 million in 1998/99. This reflects the nature of capital expenditure, which fluctuates markedly depending on the projects being funded each year.

The very large capital expenditure increase in Vote Cultural Affairs in the mid-1990s was caused by investment in the Museum of New Zealand Te Papa Tongarewa. At just $1.6 million in 1990/91, investment peaked at $70 million in 1994/95. By 1998/99, it had dropped back to $1.7 million.

Operational expenditure

As well as investing capital in cultural projects, central government also purchases cultural outputs (goods and services) from government agencies. Output expenditure on culture is much larger than capital spending. Even in the years 1994/95 and 1995/96, when capital investment in Te Papa was at its greatest, three out of every four Vote dollars spent on culture were output related. In other years throughout the 1990s, output expenditure made up at least 86 percent of cultural spending through Vote appropriations.

The Government’s output expenditure on culture is largest in the education sector. In 1998/99 this totalled $284 million (69 percent of the year’s cultural output spending), and has topped $200 million since 1994/95. These figures, however, are underestimates because they only reflect spending on early childhood education. Spending on cultural education at the primary, secondary and tertiary levels cannot be separately identified from existing data sources.

Excluding Education, the five Votes receiving the most government output expenditure on culture were Cultural Affairs, National Library, Communications, Internal Affairs and Conservation. In the 1998/99 financial year, each Vote received between $8 million and $35 million for cultural outputs.

NZ On Air 

Another funding source for the cultural sector is the broadcasting fee, payable by all New Zealand households with a television set. Throughout the 1990s the fee, collected and administered by NZ On Air, provided around $80 million annually for broadcasting.

Among the core services of NZ On Air is programme funding. This funding is aimed at reflecting and developing New Zealand identity and culture by promoting programmes about New Zealand and New Zealand interests, and promoting Mäori language and culture. In each year of the 1990s, expenditure on television and radio programmes made up well over half the organisation’s annual spending.

New Zealand Lottery Grants Board 

The third source of public funds for the cultural sector is the New Zealand Lottery Grants Board. Profits from the Lotteries Commission are channelled into various causes, and individuals and organisations in the cultural sector are among the recipients of this funding.

In the 1998/99 year, the Lottery Grants Board allocated just over $51 million to the cultural sector. This was 39 percent of the board’s total allocation in that financial year. Throughout the 1990s, the cultural sector’s share of the board’s total allocation never fell below one-third. The lowest share achieved was 34.3 percent in 1994/ 95. The highest share (43.4 percent) was gained in 1992/93.

In 1998/99 the recipients of the largest amounts of cultural funding from the Lottery Grants Board were Creative New Zealand (just over $20 million) and the Film Commission (just under $9 million).

Local government

Local Government New Zealand has conducted three surveys on local authority expenditure. The latest survey, to which 95 percent of local authorities responded, showed that in the 1998/99 financial year, local government spent $286 million on arts and culture. This equated to just under 8 percent of total local authority spending, an increase on the 5 percent revealed in the 1992/93 and 1995/96 surveys.

Local Government New Zealand produces aggregated expenditure data for four cultural categories: libraries, museums, halls and grants to community groups. Figure 2 shows how the level of cultural expenditure for the four types changed across the three Local Government New Zealand surveys. The largest dollar increase belonged to libraries which, by 1998/99, were receiving $61 million more from local government than they had been six years earlier. Grants to community groups showed the largest percentage increase between surveys (an 88 percent rise from 1992/93 to $49 million in 1998/99). Spending on museums also rose, reaching $38 million in 1989/99 after staying constant at $22 million in the first two surveys. Expenditure on halls fell slightly in each survey, finishing at $50 million in 1998/99.

 fig2

Cultural proportion of Gross Domestic Product (GDP)

Statistics New Zealand’s National Accounts Division estimates Gross Domestic Product (GDP). This represents the income earned from all production occurring in New Zealand. To calculate the cultural proportion of GDP, certain industries listed in the New Zealand Standard Industrial Classification (NZSIC) were identified as cultural and their income data aggregated.

The most recent estimate of the contribution of cultural goods and services to GDP is 2.8 percent. This figure relates to the year ending March 1996 and represents the culmination of progressive increases since 1992 (see Table 1). No single cultural industry stood out as being a major contributor to this rise.

 table1

Data in Table 1 should be regarded as estimates only. This is because the series is unofficial as it has been calculated using data from the Annual Enterprise Survey at a level outside the design parameters of the survey. Also, some cultural industries are not separately identified in the NZSIC, and some cultural workers are employed in non-cultural industries. This means the percentage of GDP attributable to cultural goods and services is likely to be considerably underestimated.

Information for this article is from Government Spending on Culture: Ngä Whakapaunga Moni a Te Kawanatanga mo ngä Taha Tikanga ä-Iwi. The fifth cultural statistics publication to be produced by Statistics New Zealand and the Ministry for Culture and Heritage, it is available from Statistics New Zealand at a cost of $20.

Footnote

1 This article was prepared by Anne Spellerberg, an adviser in the Social Policy Division of Statistics New Zealand.

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