Has there ever been a report into Australia’s orchestras that has met with their approval? Apparently not.

In 2005, the Australia Council’s current chairman, highly connected company director James Strong, delivered a report into Australia’s professional orchestra companies. It wasn’t pretty. Some of Australia’s orchestras were struggling with static or falling audiences, and rising wage costs. Strong recommended more federal funding, but also argued smaller orchestras such as the Adelaide Symphony should cut back the size of its ensemble.

Strong’s report was met with howls of disapproval from the sector. In the resultant backlash, the Howard government found more funds. In the end, what happened was that the orchestras kept their musicians and their extra funding. One of the biggest hand-outs was for the Australian Opera and Ballet Orchestra, the full-time backing band for Opera Australia and the Australian Ballet’s Sydney productions. It received $7 million extra over four years.

But six years on, the orchestras again are in trouble. Orchestra Victoria (which backs OA and AB in Melbourne) nearly went broke last year, and has had to radically restructure its management. The AOBO is also losing money. Fairfax reports: “Opera Australia last year wrote off a $5.5 million debt from the Australian Opera and Ballet Orchestra, which continues to lose about $800,000 a year.” The financial health of some of the state orchestras such as the Queensland Symphony is also waning as a close read of its financial reports quickly shows.

Now the Australia Council has commissioned another report, this time specifically focused on the so-called “pit orchestras” that service the big performing-arts companies — Orchestra Victoria and the AOBO. Written by well-known arts consultant Justin Macdonnell, whose 1980s book Arts, Minister? remains a classic in the small field of Australian cultural policy, the report pulls no punches.

“No one having regard to the complexities of this area could avoid the conclusion that it is hedged about with historically derived practice, sectional interests, arcane regulation and, in some cases, sheer inertia,” he wrote, observing bluntly that “the current model is economically unsustainable”.

The report, which Crikey has obtained, describes the archaic work practices of the pit orchestras and canvasses a series of possible business models. One is making Orchestra Victoria musicians redundant and starting again, at a cost of $3.7 million. Another is a fully casualised orchestra system in which musicians are simply paid as freelancers for the gigs they play, plus a loading.

“The essential shift needing to be made is from a model that is determined by an employment construct to one which is driven by service delivery,” Macdonnell wrote. “Funding agreements with governments for this purpose should be based on the costs of programs not on the cost of maintaining full-time ensembles which then have to find other arguments for their existence.”

Ouch! The model of full-time professional musicians is central to the very image of Australia’s orchestral music scene, so it’s not surprising they’re already mobilising to attack the report. “WorkChoices for orchestras!”, some have even cried. Of course, any criticism is always carefully framed in terms of “artistic standards”, but there is no doubt that musicians and union representatives believe this is all about pay and conditions.

As the Media Entertainment and Arts Alliance’s Howard Manley told Crikey: “The conclusion [the report] reaches and advocates for is a continuing program of cutting musician’s wages and to increasing job insecurity by putting musicians on part time contracts.

“Part-time or highly casualised orchestras rarely reach the artistic standards of a full-time ensemble.”

In one sense, Manley is right. Orchestras are costly beasts, and the biggest costs are the wages bill for a company of highly trained full-time professionals. Nor can productivity increases be easily won. As Manley observes, “it is not a serious option to play Swan Lake or La Boheme faster each year”.

Why are orchestras so expensive? According to cultural economists, the answer is the dreaded “cost disease”. Like other service-intensive sectors such as health care, costs in the performing arts are essentially driven by wages. It’s not possible to play Swan Lake faster, and it’s not possible to subtract a musician from a string quartet. As a result, costs tend to rise faster than in the rest of the economy, creating long-term issues for performing arts organisations across the rich world.

This is exactly the problem pit orchestras now face. With static funding, sclerotic management and a highly unionised and motivated workforce, the orchestras are stuck between a rock and hard place.

In the end, something will have to give, as Macdonell’s report makes clear. If the orchestras want to survive, they’re almost certainly going to have to pare back musicians’ wages and conditions. Musicians from the contemporary sector won’t be shedding any tears. A full-time wage with superannuation and all sorts of meal and travel allowances is, of course, unheard of in the rest of the industry.

Peter Fray

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