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Special Feature: Why the Government should help Live Events get COVID-19 Insurance

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13 Aug 2021

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Updated: 17 August 2021

As Australian live events continue to be cancelled and postponed across the country, the Live Entertainment Industry Forum (LEIF) would like to see the Australian government agree to a co-funded scheme to help the industry get back to business.

Last week saw the announcement of a government-backed insurance scheme to boost the events industry in the UK. The scheme is intended to help organisers plan events with confidence through to next year – after the ongoing pandemic had put a halt to this multi-billion-dollar industry.

The British Government has partnered with Lloyds to deliver the Live Events Reinsurance Scheme. This initiative will see the government act as a ’reinsurer’ – covering the costs incurred by music festivals and live events in cases where government covid restrictions legally stop the event from proceeding.

The UK Culture Secretary, Oliver Dowden acknowledged “Our events industries are not just vital for the economy and jobs; they put Britain on the map and, thanks to this extra support, will get people back to the experiences that make life worth living”.

This is very welcome recognition and news for the UK events industry, which is well on the road back, helped along by high vaccination rates and lifting of restrictions across the country.

Unfortunately, it’s a different story here in Australia.

Whilst we play catch-up on vaccinations, snap lockdowns continue to ripple across the country, shutting down entire festivals and events with very little notice. A poignant example of this being Byron Bay Bluesfest who, after already having to cancel their 2020 festival due to the pandemic, were forced to pull the pin on the 2021 event just 24 hours before doors opened.

Just last week, Vivid Sydney was cancelled for the second year running amid the uncertainty of Sydney’s current lockdown, and a long line of events and festivals of all sizes have suffered the same fate thanks to quick-fire 3-day, 7-day, and longer lockdowns popping up across the country.

Planning an event in a region with no active cases of covid, no stay-at-home orders, and an extensive COVID-19 Safety Plan in place, still presents an enormous financial risk to organisers in the current climate. As seen with Byron Bay Bluesfest, a single case can appear out of the blue and bring with it public health orders requiring immediate cancellation. Adding insult to injury, expenses can’t be recouped because insurers won’t cover COVID-19.

Simply battening down the hatches and waiting the pandemic out isn’t a viable option either. On top of the multi-billion-dollar hole the lack of live events leaves in the Australian economy annually, the knock-on effect would see many businesses go under and livelihoods lost. AV suppliers who have nowhere to pivot to with their very specific inventory of equipment. The hospitality businesses surrounding sites that rely on the tourism generated by events to survive. Down to the individual workers, many of whom have already been excluded from financial support like JobKeeper due to the nature of shiftwork in the industry, have lost their incomes and cannot hold out in limbo long-term.

I Lost My Gig Australia, a data-capture initiative of the Australian Festivals Association and the Australian Music Industry Network, has found that less than 8% of personnel in the industry have been able to operate normally since March 2020, with over 67% ineligible for any disaster relief. And at almost 18 months in, the loss of pay packets is far from over.

This has resulted in over 60% of arts professionals desperately seeking work outside of the industry. The projected loss of skill and resources with that will further hinder the recovery of live events in and of itself.

The I Lost My Gig July 2021 survey found that 23,000 gigs and events have been cancelled since July 1st – averaging a loss of almost $17 million per week in income. Disturbingly, 99% of survey respondents said their insurance did not cover their losses.

Fortunately, there has been some welcomed financial support for the industry to date, in the form of state and federal grants. More than 80 organisations and events received financial support from the latest round of Restart Investment to Sustain and Expand (RISE) funding. However, some industry members feel this type of funding does not capture all events and organisers, or the larger network of suppliers, venues and hospitality providers.

Music industry charity Support Act welcomed an additional $20m from the government to support out-of-work music and arts workers with $2,000 individual grants. Whilst the community are deeply grateful for the contribution, it likely won’t be enough for continued upkeep.

In his Sydney Institute Address: ‘Why do we fund the arts?’ earlier this year, Arts minister Paul Fletcher stated that the total Commonwealth support for the arts was nearly $2.5 billion over the last 12 months, taking into account business-as-usual funding of around $750 million per annum, and $850 million provided to creative and performing arts through JobKeeper and cash flow support.

Fletcher dismisses the notion that JobKeeper was not well designed for the arts sector as a “myth”, citing that around two thirds of all people employed in the creative and performing arts industry subdivisions received JobKeeper. In his own words, there were 645,000 people – six per cent of the total Australian workforce – employed in the cultural and creative industries in 2016. Fletcher does not address how the government ensured the other third, some 200,000+ workers, were supported.

The entire cultural and creative sector made up $115.2 billion of economic activity in 2017-2018, 6.3 per cent of GDP, according to the minister’s address. It is unclear from Fletcher’s remarks whether he believes $2.5 billion of support for a $115 billion industry is sufficient.

The arts and entertainment sector is an extremely broad umbrella-term, with many sub-sectors in very different and unique positions encapsulated within it.

The Live Entertainment Industry Forum (LEIF), a committee of leading entertainment and sport promoters and venue managers across Australia, commissioned a study by Ernst & Young in 2020 specifically looking into the live sector. The report found that the live entertainment industry alone contributed an estimate of $36.5 billion to Australia’s economy in 2019 and predicted a 64% fall in 2020 as a result of COVID-19.

There are a whole host of other micro-sectors as well. Another study, also by Ernst & Young, on behalf of the Business Events Council of Australia found that in FY19 business events provided $35.7 billion direct industry contribution. An Economic & Social Impact Study of Australian Agricultural Shows concluded that the direct and impact of agricultural shows in Australia is worth $1 billion, weddings showed $4.3 billion per year in economic contribution excluding travel, and mass participation sporting events contribute another $1.1 billion. And the list goes on.

Minister Fletcher repeatedly mentions government support for National Art Institutions and the Screen industries and does mention the targeted RISE contributions provided to a select amount of specific festivals and event organisations. However, there is no real mention of direct support for the greater event organisations or to the enormous supply-chain below them.

The live events industry is made up of a large workforce of casual staff. Many of these workers were working full-time hours pre-covid but were working gig-to-gig across multiple companies and projects which meant they were not eligible for the JobKeeper scheme. Example casual workers that might fall into this category include lighting technicians, stagehands, site managers, stage-builders, machine operators, and stage managers to name a few.

B2B event suppliers, many of whom do not have the ability to pivot for their survival, are also unclear about what government support packages are available to them. This might include the AV companies, security companies, crowd control businesses, staging providers, food and beverage companies, privately run venues and so on; the businesses that make up the backbone of events and film productions.

A government-backed underwriting or reinsurance scheme or fund for live entertainment could allow the sector to get back to supporting the entire supply chain. Providing promoters with assurance that they will be covered for losses in the event of a government-mandated cancellation due to COVID-19, could empower an industry hungry to work to navigate its own recovery.

As with the UK’s new scheme, it is not uncommon for governments to step in to fill gaps that insurers won’t.

The Australian federal government has already stepped in to provide the Temporary Interruption Fund (TIF) for the film and television industry. Administered by Screen Australia, the fund assists local productions who cannot start production due to insurance exclusions relating to employees contracting COVID-19. It doesn’t, however, cover production companies from lockdown and border closure delays currently.

On behalf of the live events sectors, several event bodies and organisations have already been lobbying for a form of this initiative since last year. Their calls appear to be gaining more momentum in recent weeks.

On August 3, spearheaded by Save Victorian Events, the ‘Inquiry into the impact of the COVID-19 pandemic on the tourism and events sectors’ was officially tabled in Victorian Parliament. The lack of ability to insure against COVID-19 risks was raised as part of the detailed report, which included thorough submissions from many industry businesses and individuals.

Yesterday, Senator Sarah Hanson-Young from the Australian Greens party stated publicly through her social media that she intended to push for national insurance assistance in federal parliament.

“Our artists, musicians and their crews are being devastated by another season of events, festivals, concerts, exhibitions and live performances being cancelled – and the insurance industry just isn’t there to help them,” she wrote.

“The Greens will move in the parliament for a Live Performance Federal Insurance Guarantee to plug this massive hole in the insurance market and help get our shows back on the road well into the future”.

A similar call continues to be made by Labor’s spokesperson for the arts, Tony Burke. Just this week, Burke delivered a speech in parliament calling for government-backed insurance and wage subsidies for the live events industry. In the video clip, which can be viewed on Mr Burke’s Instagram account, he agrees that the events industry has been “smashed”.

Input from the Industry

Gig Nation asked several key Australian industry figures to provide their feedback on the need for a government-backed insurance scheme. Here’s what they had to say:

Tiny Good, Director at Showtech Australia

“Save Victorian events, Save NSW events, and lot of businesses and associations have been campaigning the federal and state governments for Event / Entertainment industry targeted support. This support includes business interruption cover, rent and financial institution relief, and insurance for event cancellation, which is no longer available, and PL/PI which is very hard to place with insurers currently.

“If the state and federal governments will put it on the table, the industry, and the wider community will support it. If the Government/s will underwrite and oversee it insurers may have more confidence. A Workcover model could also be considered.

“The insurance and building industry confidence would lead to more work and therefore remove the need for the other types of support. The industry, from performers and crew, suppliers, promoters, venues, security, transport, catering, and all the other industries that ‘feed’ into our operations all want to work. If we can insure, and vaccinate, we can work. I believe it actually is that simple.”

Simon Thewlis on behalf of Save Victorian Events

“A viable Covid cancel insurance scheme is essential for a lot of us to get events happening again.

“In a perfect world, we’d prefer a national scheme for obvious reasons, but as the state governments control the risks state-based schemes are far more likely and are being actively pursued.  

“The hope is that we will get a scheme that will work for a lot of the very diverse event industry and not for one or two bits of it.”

Justin Nyker, Promoter & Director at Mothership Events

“It’s a real necessity. The issue is being lobbied by various groups as an industry support & revitalisation mechanism, much like the government backed insurance scheme adopted for the screen industry.

“It will provide a guarantee, or at least, significant financial risk mitigation for promoters / investors against snap lockdowns and last-minute cancellations due to pandemic responses from regulatory bodies.

“It provides support to the very foundations of the industry, providing support directly to the business structure so that the providers within the industry have security in relative workplaces and sub sectors.”

Adam McKenzie, Director at Victorian Venue, The Timber Yard

“It will give our clients the confidence to take on the risk of scheduling shows in the future – at the moment all bookings are super short notice or over 12 months away.

“Confidence in the events world is at an all-time low – we are not the same as restaurants and bars and when restrictions get lifted people don’t just come straight back to events – there is a planning lag that means the lockdowns dramatically affect us for another 4 – 6 weeks, which is causing significant financial hardship for a lot of venues.

“As a venue, when snap lockdowns get put in place, we get no support for all of the cancelled events that we need to reschedule. In effect we have zero income for the locked down days and those bookings get credited to future dates, taking away our ability to sell those. So, in effect it doubles our loss.”

Andrew McKinnon, Staging Division at Clifton Productions and Director at CrewCare

“A scheme introduced by the Australian Government that would safeguard and compensate promoters, suppliers and workers against any health-related cancellations would be welcomed by the industry.

“It would be critical that the scheme is designed so that it would be incumbent on the insured party to see that the money is appropriately dispensed to venues, suppliers and workers to the value of their losses. The RISE funding did not seem to achieve this.”

Roger Field, President Live Nation Asia Pac and Geoff Jones, Group CEO of TEG who are Co-Chairs of the Live Entertainment Industry Forum (LEIF)

“Yes [there should be a similar scheme in Australia], however we realise given the nature and unpredictability of shutdowns, this could at any time be a significant amount of money. That’s why we’ve been proposing a co-funded scheme where those that are covered are nominating an amount they contribute as a % of what they want to be covered for. No different to insurance, which can’t be obtained at the moment for CV-19. Effectively we’re asking governments to subsidise and provide a foundation amount for an industry fund.

“This is a part of a number of factors we need established as a pathway to return. As an industry, our challenge has been that we do business nationally, however we’ve struggled to navigate the differences between State and Federal policy. We need all governments to work together on a solution if we have any hope of an outcome that allows us to return to business.

“Having an insurance-style scheme such as this would be a huge benefit, but we also need national consensus on allowing performing artists to cross state borders as “essential workers” and national consistency around density rules – all of which will assist the industry climbing out of the huge hole it is in currently.”

Gig Nation has asked Arts minister Paul Fletcher, and Tourism minister Dan Tehan to provide official responses to this article and the industry’s call for a federal government-backed insurance fund. Updates will be published as received.

Photo: Annie Spratt

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