Federal Government rejects call for national event insurance scheme

The Federal Government has rejected recommendations from a Senate committee inquiry that called for a national insurance guarantee to protect events cancelled by COVID-19 restrictions.

Tabled in Federal Parliament on Friday, the inquiry, from a committee led by the Greens and Labor, explored the feasibility of a Federal Government backed insurance scheme for the performing arts sector.

The inquiry was called after Senator Sarah Hanson-Young announced the Greens’ intention to introduce a private member’s bill calling for a government-run insurance guarantee to future-proof the industry.

However, while three Coalition Senators voted in favour of the recommendation, the Federal Government released a report recommending the bill not be supported because it would require the Federal Government to provide insurance against state government actions such as public health orders that would necessitate the cancellation of an event.

The report argued that cancellation insurance schemes are the sole responsibility of states and territories, adding that the performing arts sector had already received “significant funding” from all levels of government and has “shown the capacity to recover”.

The Department of Prime Minister and Cabinet stated that market failure alone is not an argument for government intervention, particularly “if the failure does not have a material impact on the functioning of the wider market.

“But in the event of a market distortion leading to inefficient or inequitable outcomes, the cost of intervention may be justified.”

A spokesperson Federal Arts and Communications Minister, Paul Fletcher told The Guardian “as we have consistently said, it is decisions by state government health authorities which trigger the business losses faced by producers of arts and entertainment events

“Therefore, it is state governments which are best placed to provide cover against this kind of risk.”

John Watson, representing the music copyright agency Apra Amcos and Eleven Music, had earlier told the committee the live performance industry needed a national approach because touring was national.

Watson stated “the restrictions might be state-based [but] it doesn’t really help if you can go ahead with your gig in NSW but your drummer can’t get in from Victoria or Queensland,” he said.

Live Performance Australia Chief Executive, Evelyn Richardson told the committee that pre-Covid, the costs of insurance premiums against cancellations were already significant, ranging from $50,000 for a modest commercial theatre production to $750,000 for a major concert tour or festival.

She noted “the inability to insure (against Covid) is a major market failure, and there is a role for governments to intervene.”

Image: COVID-19 shutdowns have seen Byron Bay’s Bluesfest cancelled for two years in a row.