Decline in Lotto revenue to affect the arts

Decline in Lotto revenue to affect the arts

Creative New Zealand is reviewing its budgets for the 2016/17 financial year and beyond, following a further forecast decline in revenue from New Zealand Lottery Grants Board (NZLGB) for the 2015/16 financial year.

The Arts Council of Creative New Zealand receives approximately two-thirds of its revenue from Lotto NZ profits via a grant from the New Zealand Lottery Grants Board. The remainder of revenue is mostly from the Crown through the Ministry for Culture and Heritage ($15.69 million).

“The arts sector has benefited from steady increases in lottery profits peaking at $37.38 million in 2013/14, which was a record profit year for Lotto NZ. In 2014/15 revenue fell to $31 million and this financial year our latest forecast revenue from the NZLGB is $26.31 million, which is $3.69 million less than forecast at the start of the year,” said Creative New Zealand Chief Executive Stephen Wainwright.

“Creative New Zealand now stands to receive $11 million less this financial year than it did two years ago in 2013/14.

“Since 2014/15 Creative New Zealand has been using financial reserves to cushion the effect on the arts sector and has reduced spending in the 2015/16 financial year by not renewing pilot projects. Unfortunately we are now unable to sustain our current level of support for artists and the arts in the coming financial year,” said Mr Wainwright.

Creative New Zealand expects to invest $44 million in the arts and arts organisations in 2015/16 financial year. Based on current projections this will reduce to $38 million in the 2016/17 financial year. The Arts Council will look at a range of budget scenarios for 2016/17 with a final decision in July 2016.

“If NZLGB forecasts reduce further, the Arts Council will need to further reduce its expenditure,” said Mr Wainwright. “In the meantime we are advising individuals and organisations to plan ahead by developing budget scenarios that assume up to 10% less financial support from Creative New Zealand.”

Creative New Zealand’s operating costs have stayed the same in dollar terms since 2008 as investment in the arts has increased.

“In the short term we will make cost savings. In the medium term we are changing how we deliver our services so we do this at lower cost. We will also continue to advocate for the value of the arts and the importance of our ongoing investment in the arts sector,” Mr Wainwright said.

“Three ways New Zealanders can help mitigate the negative effect of the decline in revenue is by going to the arts, giving to the arts, or buying a Lotto ticket.”

Notes to editors:

• The NZLGB allocates 15% of its available funding to Creative New Zealand under section 279 of the Gambling Act 2003 and provides quarterly forecasts of anticipated revenue.

• Up to the last two years, Lotto NZ’s profit, and therefore revenue from the NZLGB, were more than expected. This benefited organisations that receive revenue, including Creative New Zealand, Sport NZ and the NZ Film Commission. Revenue received by Creative New Zealand was passed on to the arts sector through grants and initiatives.

• Creative New Zealand revenue (million):

* NZLGB forecast as at 29 March 2016

** Estimated

• In 2014/15 the Arts Council decided not to extend pilot projects beyond their end date including the already completed Creative Giving Pilot and the Sector Development Incentives Fund which ended in June 2016.

• The Arts Council also decided to discontinue Earthquake Recovery Grants for Christchurch artists and arts organisations in June 2016. All Creative New Zealand’s existing funding programmes will be available to applicants from Christchurch.

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