The federal government will launch its new national cultural policy in January, which it says will bring direction and vision back to the arts industry.

It will be built around five pillars: putting Indigenous voices at the heart of arts and culture; reflecting the diversity of Australians; supporting artists; boosting institutions; and ensuring stories reach the audience.

"The arts, entertainment and cultural sector is important to who we are as Australians and plays a vital role in the economy," Arts Minister Tony Burke said.

"A national cultural policy is the foundation for a better future for Australian artists."

The industry is still recovering from the impact of COVID and battling staff shortages for major events amid low unemployment.

The policy was flagged for release in December but has now been flagged for launch in Melbourne on January 30.

Prime Minister Anthony Albanese will set the scene about his government's commitment to the arts sector in a speech at the Woodford Folk Festival in Queensland on Wednesday.

Further arts sector funding is being considered as part of the next federal budget.

The federal government's national cultural policy process attracted more than 1200 submissions, which will be reviewed by arts sector leaders.

Consultation with the sector was conducted over a six month period, included town hall meetings in the cities and regions of every state and territory.

Australian music groups called on the federal government to set up a national agency to develop the industry.

In a joint submission to the policy, 18 music industry groups asked for an agency to deal with skills development, exports, local content incentives, insurance and intellectual property.

An expert advisory group to provide high-level advice to the government was assembled, including philanthropist Janet Holmes a Court, Australia Council chief executive Adrian Collette, writers Alysha Herrmann and Christos Tsiolkas, indigenous performer Sinsa Mansell, artist Kitty Taylor, and historian Clare Wright.

That's on top of 15 arts figures who formed five review panels based around the central ideas of the policy, namely first nations stories, diversity, prioritising artists, institutional support, and audience reach.

Australian Associated Press