When Goorie and Koori poet Evelyn Araluen won last week’s $100,000 Victorian Prize for Literature, along with the $25,000 Indigenous Writing prize, she called on the Australian government to change the way it taxes arts prizes.
Araluen won for her poetry collection, The Rot, described by the judges as “a work of remarkable poetic intelligence; formally bold, emotionally exacting and politically uncompromising.” Out of her $125,000 prize money, Araluen, who now works as an academic, may pay more than $40,000 in tax.
In Australia, while the Prime Minister’s Literary Awards are tax-free, others, such as the Stella Prize and the state-based awards, are not. While acknowledging the importance of our tax system, Araluen spoke of how other countries have “really intelligent taxation laws” that take into account artists’ fluctuating incomes.
Araluen echoes the calls of organisations including the National Association for Visual Arts and the Australian Society of Authors, which have long campaigned for tax-free art prizes. Artists who win The Archibald Prize, for instance, also pay tax, as do winners of the David Williamson Playwright Prize, the Australian Music Prize and many others.
Indeed over a decade ago, writer David Marr memorably pointed out that you wouldn’t pay tax on a win on the races at Randwick but you would if you won the Miles Franklin Literary Award. The former is true if you win TV renovation show The Block or punt on the footy.
Authors pay tax on most prizes because the money they receive counts as income for their work. The Australian Taxation Office determines that
a gift or prize is generally regarded as a personal windfall gain and not ordinary income. This is “unless the taxpayer has received the prize or gift because of, in respect of, or in relation to any income-producing activity of the taxpayer”.
A “windfall gain” is something like lotto, something that has no relationship to your paid work.
And yet the Prime Minister’s Literary Award, along with the Prime Minister’s Prize for Australian History, has been tax-free since these awards were introduced in 2008. In 2022, Macquarie University calculated the average author’s annual income (derived from their writing) was $18,200. Australian authors are earning very little for their work – tax-free prizes across the board would help buy them time to write more books.
Araluen won the Stella Prize in 2022 for her poetry collection Dropbear, which she wrote while juggling part-time jobs, “one paycheck away from complete poverty”. “Obviously tax is incredibly important,” she said last week. “But a lot of people assumed I must suddenly be rich after the Stella”. Instead she paid HECS, went to the dentist and paid 50% of the prize money in tax.
While Australia taxes artists’ prizes, 1136 large companies paid no tax in Australia in 2023-24,. They included streaming behemoth Netflix, (despite posting revenue of $1.2 billion), Optus and TPG.
A different way?
In Ireland, a suite of policies support artists. Prizes are exempt from tax and artists can apply for any sales of their work to be exempt from income tax. This is in addition to Ireland’s universal basic income scheme for artists.
In Turkey, there is a tax exemption for artists earning up to 1.9 million Turkish lira (A$60,800). If their prize, or any other earnings from writing is lower than $60,000, they pay no tax on that income.
Submissions have recently closed for a federal government inquiry into philanthropy and the arts. Given philanthropy makes up only a tiny fraction of government spending on culture in Australia (as little as $204 million was donated to organisations advancing culture in 2021, the last year for which the data was reported), this inquiry seems to be working at the edges of the problem, rather than the heart.
The same may be said for the New South Wales government’s recent summit on how artists are taxed, which received over 300 submissions at the end of 2025. Many organisations called for big increases in government funding along with removing tax from prizes and help with averaging income over multiple years to align the tax burden with artists’ fluctuating earnings.
Still, the fact is that for artists to benefit from changes to the taxation system, they first need to be earning enough money from their work. Fewer students are enrolling in creative arts at universities, in part a response to the Morrison government’s Job-Ready graduates scheme making such courses exorbitantly expensive. Once creating art, their incomes are abysmal.
Tax-free art prizes would be a start in helping Australia’s artists produce more of their best work. While manufacturing can be sent offshore, only Australian artists can make Australian art.
Alice Grundy, Visiting Fellow, School of Literature, Language and Linguistics, Australian National University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
