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Arts sector 'delighted' as government axes George Brandis' arts 'slush fund'

The arts community has rejoiced at the Turnbull government's decision to axe a George Brandis initiative for "excellence in the arts" and return the money to the Australia Council.

The Brandis-era outfit, now known as Catalyst and dubbed a "slush fund" by arts observers, allowed the minister and his department to hand-pick projects for government funding.

Australia Council chief executive Tony Grybowski declared himself "delighted" at the policy reversal, which followed almost two years of pressure from arts groups and high-profile artists.

The decision was a "positive indication of the minister's confidence in the Australia Council and our programs and activities", Mr Grybowski said.

In the shake-up, $61 million over four years will be transferred to the Australia Council, which grants funding to artistic projects, organisations and individual artists based on an independent assessment process.

That includes $32 million already handed back to the council by Arts Minister Mitch Fifield when he took over the portfolio in 2015. The purpose is to boost funding to smaller artistic enterprises.

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Senator Fifield said the change was an "important rebalancing" that showed the government was "open to feedback".

One of the first beneficiaries of the new regime will be the Victorian Opera, which will receive a $340,000 annual grant to assist its transition to a major performing arts company, Fairfax Media can reveal.

The Australian Brandenburg Orchestra in NSW will also receive an additional $250,000 a year.

Kip Williams, artistic director of the Sydney Theatre Company, said handing resources back to the Australia Council was a "great step" towards ensuring the vitality of Australia's cultural industry.

"This has been a disruptive period of upheaval for artists and for the small-to-medium sector particularly," he said. "Large companies rely upon a vibrant small-to-medium sector in order to grow and develop artists."

Evelyn Richardson, chief executive of Live Performance Australia, also welcomed the decision but maintained concerns about ongoing underfunding of the arts.

"It's not the full amount that was taken from the Australia Council and the Australia Council is still not funded sufficiently in our view," she said.

"We are concerned that significant damage has already been done. We also want to know what the bigger picture plan was for stabilising the sector."

Senator Brandis raided the Australia Council's budget to the tune of $104 million to create the National Program for Excellence in the Arts, which brought funding decisions into his own remit rather than at arm's length from government.

The program was branded a "slush fund" by the arts sector, and the outcry eventually prompted $32 million to be handed back to the Australian Council in 2015, and the initiative rebranded as "Catalyst" under Senator Fifield.

Catalyst will now shrink to a $2 million pool used by the department that will focus on areas of artistry outside the Australia Council's general purview, such as architecture and fashion.

Gene Sherman, executive director of the Sherman Contemporary Art Foundation, said the small chest of funding would be useful because "the Australia Council doesn't cater for everything any more".