Leading arts organisations are warning of job losses, higher ticket prices and fewer performances as they face budget cuts.

Our top theatre and performing arts groups have been told to brace for a 10 per cent cut because of reduced funding from the Lottery Grants Board - prompting some to urge people to keep buying Lotto tickets.

The groups say reduced funding is at odds with aims to make the city one of the world's most liveable, and threatens an industry which contributes millions to the country's economy.

They will lobby the Government for an alternative to a funding system heavily dependent on the fortunes of Lotto, and are set to launch a petition

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at the Basement Theatre's "Arts is Not a Lottery" fundraising bingo night next month.

Tongue-in-cheek it may be, but Basement co-general manager Sam Snedden is serious. He says it will highlight recent cautionary advice from arts funding body Creative New Zealand (CNZ) that it may have to cut financial support by up to 10 per cent because of declining Lotto revenue. CNZ chief executive Stephen Wainwright says if people want to help, they should go to arts events, make donations and buy Lotto tickets.

CNZ will make a final decision in July and is considering various scenarios. It has already cut costs, not renewed some pilot projects and is stopping Earthquake Recovery Grants for Christchurch artists and arts organisations.

CNZ receives 60 to 70 per cent of its revenue from the Lottery Grant Board, but the amount fluctuates depending on how many New Zealanders play Lotto. Fewer of us have been doing so because jackpots have been low.

CNZ expects to invest $44 million in the arts in the 2015/16 financial year but says this is could fall to $38 million in 2016/17. The Ministry for Culture and Heritage also provides $15.69 million annually while private donations account for up to $2.4 million.

Those in the arts sector say they're already working hard to stay within budgets and it's time for serious conversations about alternative funding models.

Sam Snedden of the Basement Theatre. Photo / Michael Craig
Sam Snedden of the Basement Theatre. Photo / Michael Craig

Silo Theatre executive director/producer Jessica Smith says the sector needs to unify.

"It's not a theatre thing or a music thing. It's pan art-form and a major challenge for the country's entire cultural sector.

"We have some of the best creative minds in the world in this country and we are continuously being held up on the world stage as excellent. We are also an economic force in our own right - we provide jobs and opportunities - so it's time to advocate for a more stable and bigger investment from government."

In Auckland alone, there are an estimated 9044 arts and cultural industry businesses - 5.6 per cent of the region's total - employing around 17,896 and contributing $1.8 billion a year to Auckland's GDP.

Auckland Council has recognised the importance of the sector in developing the world's most liveable city by releasing a region-wide action plan to grow arts and culture. And a survey for the 2013/14 year found nine out of 10 Aucklanders had attended or participated in at least one arts event.

Auckland Philharmonia Orchestra's chief executive Barbara Glaser and Auckland Theatre Company's general manager Lester McGrath say relying on funding as volatile as lottery grants doesn't give the sector confidence to plan. Ms Glaser says the Government could look at more stable funding as a basis while different models or more generous tax incentives for private donors could be investigated.

How can companies such as NZO plan for sustainability in a funding environment that is by definition a gamble?

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"In the last five years, we've significantly increased our philanthropy and sponsorship streams, and in a country the size of New Zealand this is no mean feat, and we're very proud of our achievements.

"We've worked extremely hard to increase philanthropy and sponsorship income in recent years and what we don't want to see is a reduction in government investment counteract this trend."

Mr McGrath says research shows for every dollar invested by CNZ in 2014, it generated a further $2.43.

"This investment contributed to the equivalent of 750 fulltime jobs to the economy and generated 956,000 arts experiences across New Zealand. Public investment is a hand up, not a hand out."

NZ Opera general director Stuart Maunder questions whether arts funding should be so heavily dependent on lottery income.

"At least in the UK, lotteries funding is focused on special projects or capital projects. In New Zealand, this funds the core business activities. How can companies such as NZO plan for sustainability in a funding environment that is by definition a gamble?

"I have always believed in 'performing one's way to sustainability' and if you reduce activity, you die. We are at the limit of cutting operational costs and achieving savings from cost-cutting, therefore any cuts in funding will ultimately result in a cut in our output."

Basement Theatre co-general manager Snedden also has a stark warning over ticket prices: "We'd have to take a close look at reorganising our risk-share model; at the moment, we take 20 per cent of the box office but that might have to rise if funding is cut. We really don't want to do that."

Orla Boylan in NZ Opera's Tosca. Photo / Supplied
Orla Boylan in NZ Opera's Tosca. Photo / Supplied

Arts, Culture and Heritage Minister Maggie Barry doesn't share the industry's pessimism. She says it only needs a couple of big jackpot prizes to attract Lotto punters back and "the balls might just roll our way".

Ms Barry says CNZ has benefited from Lotto boom years - in 2013/14 it received $37.38 million from the Lottery Grants Board - and, because of this, it should be able to weather less profitable years.

She would not be drawn on whether this year's budget would contain any extra money for the sector - "we'll have to talk about that in May" - but says she will always champion arts and culture, particularly when it comes to drawing support from business and private philanthropists.

Art attacks

What would a 10 per cent funding cut mean to some of our highest-profile arts organisations?

Auckland Theatre Company: Receives about 17 per cent of its overall revenue from CNZ; a 10 per cent drop equals a reduction of around $98,000.

Auckland Philharmonia Orchestra: Receives 22 per cent of its revenue from CNZ; a 10 per cent drop equals a reduction of around $231,858.

Basement Theatre: Receives 36 per cent of its revenue from CNZ; a 10 per cent drop equals a reduction of around $35,000.

New Zealand Opera: Receives around $3.65m from national and local government; a 10 per cent drop equals a reduction of around $260,000.

Silo Theatre: Receives around 30 per of its revenue from CNZ; a 10 per cent drops equals a reduction of $42,000.