It might seem rather lax to forecast the year ahead in culture. We’re already well into January after all. But summer is the peak time for many in the arts profession, particularly those working on our nation’s many music and arts festivals, with the Big Day Out about to get into full swing and the Sydney Festival already well under way.

It’s always difficult to sum up a sector as diverse as culture. Nevertheless, some clear trends are emerging. The year ahead will be dominated by a few key themes: the announcement of the federal government’s National Cultural Policy, the deflation of the music festivals bubble, and fraught times at many of Australia’s small and medium-sized arts companies.

In the policy sphere, 2012 promises to be the year when Labor finally hands down its National Cultural Policy, a potential game-changer for many key organisations in the arts sector. While the policy has been slowly winding its way through multiple rounds of consultation since 2009, Arts Minister Simon Crean has lately been signalling that the new blueprint for the way the federal government will address the arts and culture could be announced around the time of the budget in May.

The announcement late last year of a review of the Australia Council, the nation’s peak body for arts funding, opens up some intriguing possibilities concerning the future structure of federal arts support. It also, at least in theory, could open up the debate about exactly what sort of culture the council should be supporting, and the size of the various pieces of the arts funding pie. On the other hand, as Crikey noted last year, given that one of the men heading the Australia Council review is himself a board member of a major performing arts organisation funded by the council, it may be the review is simply a handy way of heading off criticism from the sector.

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Whatever the eventual shape of the new cultural policy, it will have to be delivered in straightened times for the federal budget. This means there is unlikely to be any new money, even for longstanding Labor priorities such as indigenous arts.

While Canberra is keeping its wallet shut, for companies that rely on support from the state governments 2012 could be a difficult year. Last year already saw short-term crises for a few nationally recognised small and medium-sized companies, when the South Australian and Tasmanian governments cut back on their arts funding. Small but important companies such as Leigh Warren and Dancers and Island Magazine discovered that venerable histories and national reputations were no protection from state treasurers intent on restoring local balance sheets.

While the new Coalition governments in New South Wales and Victoria maintained their arts funding on coming to office, there are rumours of future cuts in Victoria and arts companies in Queensland are decidedly nervous about what a Campbell Newman-led government in the Sunshine State might mean for their organisation.

In music, 2012 looks to be a difficult year ahead for many festival promoters. The spring and summer of 2011-12 has offered worrying clues that the seemingly insatiable demand for live music experiences could be slackening. Music industry insiders say it was inevitable. The explosive growth in  the numbers of events and in ticket prices has created a crowded market for music festivals, particularly in summer. Demand has by no means collapsed, with many festivals still selling out. But the salad days of endless growth and soaring ticket prices appear over.

As a result, a number of smaller events have cancelled or disappeared last year, including Rewind Australia, the Great Southern Blues Festival, Raggamuffin and Funk N Grooves. At the top end of the market, marquee events such as the Big Day Out have been forced to restructure, while Queensland’s Splendour in the Grass failed to sell out for the first time in its history.

There could be more carnage to come. Festivals are cutting costs, downsizing their production and reconsidering their booking strategy in recognition of a much more cautious festival patron. They’re also chasing funding. In the case of the Falls Festival in Victoria and Tasmania, festival promoter Simon Daly has got out his begging bowl, demanding more money from the Tasmanian government as the price of continuing the festival on the Marion Bay site. The trend will no doubt be replicated with other festivals in other states, as savvy promoters realise they can trumpet their tourism numbers and other “multipliers” as a way to leverage taxpayers’ cash.

In the film world, the headlines will be grabbed by Baz Luhrmann’s Great Gatsby, but the sky-high Australian dollar means local production will most likely remain in the doldrums. With Gatsby already finished shooting (although post-production continues), 2012 could be another lean year for local crews and production workers, outside of a few bright spots driven by local television investment.