The Australian live entertainment industry could see A$23.6bn (£12.9bn/€14.2bn/$16.7bn) in lost economic output for the sector in 2020 if COVID-19 restrictions remain in place until the end of year, a new report has found.
Preliminary findings from The Economic Cost of COVID-19 on Australia’s Live Entertainment Industry report quantify for the first time the total economic output of live entertainment in Australia, at an estimated A$36.4bn in total contribution in 2019.
The report by EY estimates that the pandemic has led to a fall of 65 per cent in the economic output of the industry to A$12.8bn in 2020 if restrictions remain in place until the end of year. Similarly, the total value added by live entertainment is predicted to fall by 65 per cent from A$16.6bn in 2019 to A$5.9bn in 2020, a fall of $10.7bn.
In 2019, the sector supported 122,000 full-time equivalent jobs, and the report has forecast that in 2020 this will fall two-thirds – or 79,000 – to just 43,000 full-time equivalent jobs if current restrictions on gatherings remain in place until the end of December this year.
Geoff Jones, chief executive of TEG, said: “EY’s report demonstrates that when the live entertainment industry does badly, Australia loses. Almost all of our revenue disappeared overnight when COVID-19 restrictions closed down the industry in March and while the return of sport with limited capacities has offset some of that impact in EY’s figures, for commercial live entertainment operators both large and small, revenue in September/October remains at no more than 10% of 2019 levels.”
Following the news, the Live Entertainment Industry Forum (LEIF), which represents Australia’s largest live event businesses, has urged the federal government to provide additional support to the sector to prevent further job losses and lasting damage to the sector.
LEIF has recommended industry specific initiatives that include the continuation of a JobKeeper-style support program for employees in our industry until such time as the live entertainment industry returns to normal operation and without the constraints of major restrictions, as well as a moratorium on goods and service tax on live event tickets, following the precedent set in the UK.
It also hopes to see an industry-led Live Entertainment Business Interruption Fund underwritten by Government, as well as a significant expansion of the RISE grant funding program, with a particular focus on assisting commercial, non-subsidised live entertainment operators to deliver popular live events in COVID-safe formats.
James Sutherland, chair of LEIF, said: “The Federal Government is understandably focused on jobs. This vitally important report shows that our sector, which normally supports 122,000 full-time equivalent jobs, has lost nearly two-thirds of those jobs this year.
“JobKeeper has provided a lifeline for our sector, but the prospect of it disappearing in March 2021 – when the industry is likely to remain massively inhibited by key pandemic-related restrictions – is of grave concern to all industry operators. For our sector to operate profitably we require venues operating at full capacity, unrestricted interstate movement, and open international borders without extensive quarantine. Without those necessary conditions, the outlook is truly bleak.
“Given the long route to recovery, and the nature of lasting restrictions, we believe that an industry extension to JobKeeper is a fair and important next step.”
Matt Colston, associate partner at EY and Asia Pacific leader of EY’s sports, events and venues advisory said: “Live entertainment is a huge part of the Australian culture. Through our work with the Live Entertainment Industry Forum, we know that the industry has been severely impacted in 2020 as a result of COVID-19. We have also been able to demonstrate just how important a vibrant Live Entertainment Industry is to our economy, contributing over $36 billion in 2019 and employing an estimated 122,000 people.
“A simple, targeted action that will do a great deal to help our industry is a moratorium on GST on sales of tickets to live entertainment until 30 June next year. This will help us to offset the increased costs we are incurring to make our events COVID-Safe.”
Last week, LEIF released its COVID-Safe Guidelines, which include measures regarding cleaning and sanitisation, crowd management, physical distancing plans, health monitoring and contact tracing.
Currently in New South Wales, large venues attendance to a ticketed event with allocated seating must not exceed 25 per cent of capacity or 10,000. Meanwhile public gatherings are restricted to a maximum of 30 people in Queensland, though these limits do not apply to businesses operating with a Covid-safe plan, such as concert venues, theatres, arenas, auditoriums, stadiums, nightclubs, and outdoor amusement parks. There is no limit on the number of people allowed at public gatherings in Western Australia, as long as there is at least two square metres of space per person. There is a 50 per cent capacity cap on major sport and entertainment venues, such as the Optus Stadium, HBF Park and RAC Arena.