Kathy Keele is well acquainted with the f-word. As boss of the Australia Council, she’s responsible for distributing more than $170 million worth of government funding for the arts every year.

It’s a job that has its fair share of critics. Partly because publicly-funded art is such a controversial topic; mainly because everyone always wants a bigger slice of the pie.

But without it, a whole lot of art in this country simply wouldn’t get made or exhibited. And if it did, it would look, sound and feel very different to the way it does today.

“In terms of the publicly-funded subsidised arts, they are of essential importance,” says Justin O’Connor, a professor at the creative industries faculty at the Queensland University of Technology. “If you’re a big arts institution looking for consistent public funding they’re the people you have to deal with.”

That’s not to say that all they do is fund art. Backed by 115 staff, OzCo (as it is also known) also commissions research, encourages philanthropic and corporate support for the arts and provides submissions on arts policy to the federal government.

But it’s the organisation’s funding arm which wields the chequebook — and with it the most influence. In 2010-11, the Australia Council funded 1897 grants and projects, with 48% going to individual artists and the rest to small, medium and large-sized art bodies.

“What I have to do is make sure that the process for accepting applications and assessing applications is as professional as it can be,” Keele tells The Power Index in a brogue that betrays her Pacific north-west upbringing. “Because in the end basically with the level of funding we have and the level of applicants, we know we’re going to have to say no to 70-80%.”

Most of the money is channelled through seven major peer-reviewed expert boards (Aboriginal and Torres Strait Islander arts, dance, literature, major performing arts, music, theatre and visual arts), each of which decides what gets funded. It’s a complicated process which sees the Australia Council draw a lot of flak, particularly that the boards are inflexible and out-of-touch, and that the decision-making procedure lacks transparency.

“Funding from the Australia Council is pretty unscientific,” one former national festival director, whose event had its funding cut with little official explanation, tells The Power Index. “It seems like personalities on any given board and their individual views are more important than broader considerations.”

Keele acknowledges that the Australia Council could be more effective at explaining the funding process to its stakeholders, particularly the role of the expert boards.

Other detractors take issue with which groups the Australia Council chooses to fund. More often than not, it’s the flagship arts organisations which take home the majority of federal government funding.

Festival director and broadcaster Marcus Westbury says the current set-up of the Australia Council does not reflect the blurring lines of arts and culture.

“The Australia Council does a really good job at being the organisation that represents a 1975 year of Australian culture,” he tells The Power Index. “They represent certain kinds of ideas and ideals of what Australian culture was or should have been.”

Of the $177 million funding allocated by OzCo last year, around $90 million of it went to a select cabal of 28 major performing arts companies which includes the likes of the Sydney Theatre Company, Circus Oz and Bell Shakespeare.

In fact, Opera Australia remains the best-funded arts organisation in the country, taking in around $20 million worth of taxpayers’ money. It’s those decisions which pour fuel on the fire of how art is funded in Australia, particularly the perception that some art is considered worthy of public subsidy and some isn’t.

But Keele says the Council’s hands are tied when it comes to funding the major performing arts. Her organisation only has discretion over around $50 million worth of funding; the rest is funding already allocated by government which they then administer. As she puts it, she couldn’t take money away from opera even if she wanted to.

*Read the full profile at The Power Index