RM309 Million And The Arts

The latest edition of our federal government’s proposed annual budget was disclosed 30 Sep 2005. This time around, it seemed like there wasn’t as much fanfare as the year before, which, importantly for the Malaysian arts scene at least, saw the birth of the Ministry of Culture, Arts, and Heritage (MOCAH). That was what I thought as I listened to the goings on in the august Dewan Rakyat via radio. Somehow, the entire tabling of the 2006 Budget felt like…  not much.

To be accurate, though, there were specific proposals that affect the Malaysian arts and culture circle that have taken effect since then, seen in Paragraph 92 of the full 2006 Budget speech. Here they are, as compiled from the Appendix to that speech:

  1. A review of tax exemption on royalty from artistic works

To further encourage Malaysians to produce artistic works, it is proposed that income tax exemption on royalty or payment from publication of, or the use of or the right to use, any artistic works (other than original painting) and recording discs or tapes be increased to RM10,000 a year.

  1. Tax exemption on equipment for the performing arts

To enhance the quality of stage shows and performances, it is proposed that import duty and sales tax exemption be given on equipment used in stage shows and performances provided such equipment is basic to the core activity and not produced locally. In addition, if such equipment is produced locally, sales tax exemption will be given.

  1. Review of withholding tax on technical fees

To achieve excellence in performing arts and the production of creative crafts, it is proposed that income received by non-resident individuals who train Malaysians in such fields and related technical areas be exempted from withholding tax.

I also found some dry figures (they really are, so skip this if you’re allergic to stats): MOCAH’s estimated operating expenditure budget for 2006 is approximately RM309 million (which makes up 0.38% of the total amount received by all ministries, but up 11% when compared with the 0.34% MOCAH received in 2005). Kinda makes you wonder, where’s all this money going to, don’tcha?

With these facts and figures running in my head, I caught up with a couple of people who represent their field to find out their responses – or lack thereof – to these three proposals.

Pete Teo: Something doesn’t sound right

First up, I spoke to singer-songwriter Pete Teo to find out if point #1 of the Budget does anything for him and his fellow troubadours.

“As far as I am concerned, it’s like trying to fill an ocean with a bucket. Given the piracy problems in this country, not many get meaningful royalty payments to make the tax carrot effective. But I guess it’s better than nothing.

“Generally there’s not very much that [the government] can do, directly. I mean, all these tax exemptions and all that, it’s better than nothing, you know, but to what extent would it help seasoned or new musicians is debatable. Because how many musicians receive sufficient royalty for it to matter anyway? When you get your 800 bucks a year, it ain’t gonna be of much use. And that’s one issue.

“So, [this tax exemption] is hardly a big grassroots’ benefit arising out of a major public tax law. I would say that the people who would feel the benefit of this is probably less than, and this is a guess, but I would say about less than 30 people in the whole country. The industry is small to start off with, and when you read the credits, it’s all the same people anyway writing those songs.

“It’s better than nothing, but at the same time it’s not a big step forward.”

Mac Chan: How many theatres does it take… ?

Next, I got a hold of Mac Chan, independent Lighting Designer/Theatre Consultant, who handled some design aspects of the technical layout at the KL Performing Art Centre in Sentul.

“Generally, I’m not very surprised. I think we’re still far behind. I mean the tax exemption on the equipment side doesn’t really impact us that much, to be honest, because how many theatres are we going to build in a year? And how many theatres are we going to build within 5 years?

“Well, OK lah, [this tax exemption on equipment is] good news. Whenever you need to build a theatre you don’t need pay so much lah. That is also very ‘killing’ because normally technical equipment for the performing arts is taxed about 30 percent. So that’s good news for developers. But not so much for the end-users.”

What should the Government focus more on?

“The [entertainment] tax exemption for performances…  that is going to have a big impact, but there are still some things about it that is not yet resolved. I think, if I’m not wrong, the tax exemption is still within the federal territory, it’s not a nation-wide policy. And that’s a [huge difference], because in other states, these entertainment taxes are very high, it’s about 20 percent, I’m not very sure. I think PJ is 25 percent. The point is, they can’t differentiate between the entertainment and the artistic performances. You see, they lump it into one category, which is not very fair.”

Chae Lian: Arbitrators of Aesthetics

For the 3rd point, Chae Lian, a producer with Gardner & Wife, which actively brings in foreign productions, gave some strong opinions.

“In terms of practical application, it doesn’t seem to have much change to the status quo, although I suppose the only difference would be if you were say, a school, and you brought in a lecturer for a two or three month period, and you actually didn’t stage a production, so you were only bringing in a guest lecturer, I suppose that is the only way I could see that this particular ruling has made a difference.”

What does she think of the Pak Lah administration’s stand on the arts?

“I think that the government needs to make a decision with regards to what they believe the role of the arts is in our society, and I think that has been an issue which they have not dared to openly… declare. So you have a situation whereby they keep saying they want to promote arts and culture, but when you look at our legislation, our requirements for things like permits, and you look at things like censorship, the opposite is actually correct, which is that they are actually trying to prevent the arts [from developing]… so what they say, and what they do or do not do, is actually more indicative of the reality.”

Chae Lian elaborates.

“If one were to pay lip service and say, ‘Oh, we want to encourage the arts … ‘ But when you look at the reality in terms of our laws, and our rulings, and the way the government has taken the position of being arbitrators of aesthetics, you know, ‘what is allowed and what is not allowed,’ then you have to sort of ask yourself, what are [they] actually saying?

“And the fact that the government still does not want to take that step of making that kind of decision I think shows that all this is just lip service. Because they’re not really doing anything concrete at the moment, or there doesn’t seem to be anything concrete in terms of legislation to put the power of aesthetics into the hands of the practitioners or even the market forces. You’re not putting the power into either the people who are practising or the people who are paying for it.”

Lina Tan: Encouraging the Indies

What do people in the film-making scene think of all of this? Lina Tan, Executive Producer of Red Films that produced Bernard Chauly’s ‘Gol & Gincu’ earlier this year, offered the following thoughts.

“Honestly… what was the budget… I know they increased sin tax [laughs].

“But really, at the end of the day, the ones I think really need encouragement are the independents, the smaller ones who are doing stuff on their own, the little theatre companies who are pushing hard to get sponsors…  I don’t see any benefits (of the budget) in that sense to them.”

What would really help local, independent filmmakers, from a national budget point of view?

“What would really benefit the film-making circle, and I don’t see it happening yet is that whole system where some money or taxes on entertainment goes back into the filmmaking budget. For example, filmmaking grants.

We all talk about getting grants and not loans, you know, because the government has made loans available but how many people have that kind of money to pay back… if you want to encourage young people to do their stuff, that means you need to give out little, little grants.

“And what I think hasn’t been thought through is the whole system of where these truces are being used to support these grants. And [the money] goes back lah, I mean you can use taxes from Hollywood movies that come in, where a small percentage of those truces goes into these grants, and all this is being used to fund the ‘art-ier’ films, you know, more independent, smaller projects.

“I don’t see [the Budget] affecting [filmmakers]. In fact I don’t see any taxes being used to help the filmmakers, so far lah. For us, we haven’t gotten the impact of it just yet lah.”

Wilson Wong: Policing Policies

We’ve heard from some practitioners (who of course don’t represent the full breadth of the scene), so I then sought the voice of someone who has been studying these policies over time. Enter Wilson Wong, who is an actor, director, lighting designer, and right now, a PhD student (Economic Psychology) in the UK, and previously a ICT for Development (ICT4D) policy advisor with the National IT Council Secretariat in Malaysia. You scared yet? He responded via email from London. What would be the implications, if any, of this Budget on arts practice in Malaysia? “In terms of the impact on arts practice, there are some positive points – Para 24 talks of facilitating travel of knowledge workers. If arts practitioners with whom Malaysian artists and practitioners are collaborating fall into this category, we should have less hassle in securing entry permits and work permits. Para 92 talks about exempting such professionals from withholding tax suggesting that their contribution to the development of Malaysian arts and culture is recognised. Read together, arts companies should, in theory, have an easier time getting clearances.”

How does the 2006 Budget reflect the Pak Lah administration’s stand on arts, culture, and heritage?

“I think there is acknowledgment that arts, culture and heritage play some role in the quality of our national life. What is not clear is whether this is viewed holistically.

“I see little evidence of arts and culture being seen as more than a static practice (like for tourism). No reference is made to the fact that the arts contribute to skills development of many Malaysians in various creative industries (advertising, media, design), national branding (our films/ visual arts continue to tour festivals globally presenting a modern, thoughtful and critical comment on contemporary life which is an important factor in making Malaysia an attractive stopover for knowledge professionals).

“There appears to be no role for arts and culture in AIDS, health, youth, education and debate on social issues, although all these have received the support of arts practitioners in (at least) the last 25 years.

“One concession of interest is the group relief (para 31). If this applies to any group of companies, then companies who own arts facilities can effectively cross-subsidise operations. For patrons of the arts, this could be of real benefit to the arts communities. This warrants more investigation on the fine print. If properly organised as groups, companies like YTL/ the Actors Studio, can then take on riskier productions, more innovative programming, knowing that 50% losses can be offset against profits in the other companies. Although this favours larger companies, this is a concession that could prove useful.

Ann Lee: Middle-class, horny, younger rebels

Lastly, I spoke to Ann Lee, a writer and director who spends her time in many places, yet still finds the time to stay connected to happenings at home, as well as sneak in a theatre performance or two whenever she’s in town.

I wanted to know her response to the budget, and how the local arts scene can benefit from more Government intervention, and got a fascinating insight into the merits (or lack thereof) of interventionism in the arts instead.

“Actually, am not a great fan of lots of Government intervention… but understand for example that nation states (and their predecessors) have used the arts for all kinds of purposes – either for individual or group glory of some kind. Therefore, there is a Game with known rules and it can be played. Nationalism and national cultures ain’t all bad, and besides, alternatives always exist on the fringes/margins which resist and contest these ‘impulses’ to create dominant ideologies of what is official culture. I like my culture official and unofficial, if you will.

“Government intervention is not so much necessary/unnecessary as unavoidable – which I think the question presumes. However, I don’t agree that Government is necessarily ‘big G government’, only imposing from on-high. Government is also government with small g – local government (of whom say, a local government official is your time-honoured poet or playwright’s pet hate; easy pet hate).

“At any rate, I do believe government support is a double edged sword, though one should be willing and able to happily wield it and try it for size.

“Could be argued for example that Government is the People. And fuck the People. All bloody Plebs. What did they ever really care about the Arts (even if spelt with a lowercase a). Just give me the thinking middle-class and horny, younger rebels with their conviction, for breakfast…

“Re. double edged sword, I believe that in the case of Singapore for example (a good example of a State that is close to home and just as ambitious in terms of how the world sees it re. financial investment), all the support in terms of funding and spaces has enabled Singaporean theatre to develop, but how exciting is it? Too much Government makes a good girl choke.”

But is there any way to make good of the powers-that-be?

“If you insist on a Christmas Wish, then, I would choose something in the area of Education: ensuring that Malaysian schools had adequate drama teachers (quality and quantity, as well as access to music, literature and art) would be a big plus. Invest public money in teachers to be trained. Change the curriculum to allow for Drama to be a subject at UPSR, PMR. Improve schools facilities.”

It seems like there is a lot of work to be done, and that there’s no respite in the shade of this 2006 Budget. I’d like to return to Chae Lian’s observations, which resonate with my own sentiments.

“So I think all this talk of money… I think a lot of it is lip-service. I think that’s kind of typical of the way the arts is viewed in this country, which is seen as something for the elite, it is not seen as something serious, or something of a social service, which, in a lot of European countries, it is. [In Europe] funding for the arts is no different from funding for public libraries or hospitals. I mean, you don’t expect, as a country, to make money from a library or a museum, but you fund it because it is good for your society.

“I think we still have quite a long way to go, because the government has not made up its mind as to what role the arts actually plays in our society. Whether it’s a capitalist role, like in terms of West End and Broadway, or whether it’s a socialist role, like in a lot of European countries…

“Either way, a decision has to be made, and right now, nothing is being done.”


End notes:

Para 24 – Malaysia aspires to be a regional hub, especially in the services sector and knowledge-based industries. Therefore, it is important that we facilitate the travel of knowledge workers and business travellers to Malaysia. In this regard, the Ministry of Home Affairs is taking measures with the view to facilitating and expediting the issuance of visas, particularly for knowledge workers and professionals in the fields of ICT, financial services and high-technology industries. In addition, the Expatriate Committee and Inspectorate Units of the Immigration Department will be strengthened.

Para 31 – The Malaysian corporate landscape increasingly consists of large groups of companies that comprise many subsidiaries. The Government recognises that venturing into high-risk projects requires large capital outlay and there could be losses during the initial years of operation. Such potential losses could discourage companies from undertaking investments, which are beneficial to the economy in the long run. The Government, therefore, proposes to provide group relief to companies within a group, with a minimum of 70% ownership between them. The group relief allows 50% of a company’s current year losses to be offset against the profits of other companies in the same group. In addition to reducing the cost of doing business, this measure is expected to increase the nation’s competitiveness, as well as encourage more investments.


Fahmi Fadzil is a member of Akshen and the TV host of Short Cuts.

First Published: 30.12.2005 on Kakiseni

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