Federal Arts Minister Simon Crean has announced a wide-ranging independent review of the Australia Council for the Arts, the federal government's peak arts funding and advisory body. But it's been hopelessly compromised at the start. "The new National Cultural Policy will set the framework for Australian government support for the arts, culture and the creative industries for the next decade," Crean said in the announcement, pointing to the "huge response from artists, audiences and community groups" to the government's discussion paper on the National Cultural Policy. Crean appears to be positioning the review to examine the Australia Council's increasingly sclerotic and inflexible funding procedures, which have proved unable to respond to the changing nature of culture, particularly digital cultural practices. The Australia Council abolished its New Media Arts Board, which had previously supported digital practice, in 2004. "As part of this work, we must have responsive, timely and expert agencies to deliver support to artists and arts organisations as they respond to new audiences and opportunities including those opening up with emerging art forms and technologies," he said. The review will be conducted by Angus James and Gabrielle Trainor. And that's the first problem. The terms of reference for the review, released to Crikey late yesterday by Crean's office, show it will specifically focus on the "governance" and "administrative model" of the Australia Council, including its structure, funding arrangements, internal budgeting, peer-review processes and the Whitlam-era Australia Council Act (1975) that governs the agency. But the findings will not be made public, and the man chosen to lead it appears to have an obvious conflict of interest. James, formerly the Australasian boss of ABN AMRO and currently advising clients in the mergers-and-acquisitions sector at his corporate advisory partnership Aquasia, is also the deputy chairman of the Australian Chamber Orchestra. The Australian Chamber Orchestra is a key client organisation of the Australia Council; last year it received $1.7 million in funding. In other words, James will be reviewing the organisation that funds the organisation of which he is the deputy chair. The conflict of interest is made more acute by secrecy of the findings. Unlike the media inquiry currently being conducted by Ray Finkelstein, this review will not take public submissions or hold public hearings. Nor will it publicly report. Crikey has been told by a Crean adviser it will instead feed into the National Cultural Policy deliberations and that the eventual outcome of the review will be reflected in the final shape of that policy. The National Cultural Policy is now more than three years in the making, having held two separate rounds of submissions under two different arts ministers. But there is still no deadline for the policy's release. Nor is it clear how this review will relate to the promised Mitchell Review into arts philanthropy, announced earlier this year. That review was promised to be completed by the end of 2011, which now seems unlikely. In its 2009 handbook on conflicts of interest, In Whose Interests?: Preventing and managing conflicts of interest in the APS, the Australian Public Service Commission defines conflicts of interest as:
"… a conflict between the public duties and private interests of a public official, in which the public official has private-capacity interests which could improperly influence the performance of their official duties and responsibilities."
It also states that "a situation that looks like a conflict of interest may be enough to undermine public confidence, even if in fact there is no conflict or it has already been resolved". A prominent corporate governance adviser to many public sector clients, with a specialty in the arts industry, told Crikey yesterday that James has a clear conflict of interest in the current review. She argued he should step down from the Australia Chamber Orchestra board while the review is being conducted. Contemporary music advocate John Wardle agreed: "The review does need to be done independently. We've already had the wrong people at the helm of the organisation, and the minister is looking compromised by appointing a review team who could be perceived as having a conflict of interest." James was contacted for comment last night but had not responded by deadline. A thorough review of the Australia Council's governance, administration and funding operations will touch on many aspects that will be material to the governance of the Australian Chamber Orchestra. The funding structure under which the ACO is supported -- the Major Performing Arts Board -- is not peer-reviewed, and funding is ongoing and recurrent. Organisations cannot apply to be in the Major Performing Arts Board, but instead must be invited. There is no open, public process under which organisations funded are assessed. The ACO has not been silent in the debates surrounding the National Cultural Policy. The ACO's artistic director, Richard Tognetti, has been an outspoken opponent of attempts to reform the Australia Council. In August 2010 he told ABC News that if attempts are made to support new media arts or other forms of creativity "one of the orchestras or leading companies might be destroyed". In a memorable overstatement, Tognetti argued any cuts to funding for orchestras would be "a bit like saying we'll burn all the books because we've all got iPads now".