Towards a Vibrant and Sustainable Creative Economy for the Arts

Mr Speaker, Sir, thank you for the opportunity to address the House today on Singapore's creative economy. Before I start, I would like to declare my interest as both an art historian and the owner of a digital art magazine.

I would like to start my speech with a trip back in time, specifically, let us travel back to the year 1995. In that year, a man boldly walked up to the then-President of Singapore, Mr Ong Teng Cheong, at a major art event. That man spoke to the President briefly, the President nodded and the man proceeded to put on a jacket. That jacket had bright gold lettering on the back of it and that man was none other than Mr Tang Da Wu, one of Singapore's most celebrated artists, and the gold lettering on his jacket read, "Don’t Give Money to the Arts."

Once the jacket was on, Tang passed the President a handwritten note which also said, "I am an artist. I am important."

This performance has entered into the annals of Singapore's art history. As with many pieces of performance art, it is dripping with irony and wit. The pointed message on the jacket about funding, contrasts with the genuine plea in the note that the artist is, in fact, important. It is a concern that was relevant in 1995 and continues to be relevant now. This jacket now hangs in the National Gallery across the road and is part of Singapore's national art collection.

This artwork is perhaps one that immediately comes to mind – at least amongst Singapore art historians – when one thinks about the creative economy. The creative economy was one of the key pillars in the latest National Arts Council (NAC) Arts Plan, which was issued in September this year. In it, Minister Edwin Tong referred to a desire to "unlock Singapore's creative economy and to create good jobs." The term "creative economy" then goes on to appear more than 20 times in the body of the Arts Plan.

While there is no single definition of the "creative economy", the Arts Plan refers to the United Nations Committee on Trade and Development, which defines the creative economy as the intersection of human creativity and technology or products that have economic value. The Plan then elaborates that, "This includes a wide variety of sectors, such as architecture, design, fashion, film, music, performing arts and television."

In Singapore, a tremendous amount of Government funding has been poured into the arts community. From 2013 to 2021, a total of approximately $3.16 billion had been provided to the sector as a whole. Under Singapore's law, charitable purposes, in respect of which charities may be constituted, include the advancement of the arts and heritage. So, while there are many for-profit arts businesses in the space, our legislative framework for charities and the practices of the Government lend support to the view that arts offerings are also public goods, which fulfill an important social aim.

And this is an important point. Our creative economy relies both on private enterprise and public support. As Minister Edwin Tong has said in his foreword to the Arts Plan, the arts have an important role in forging a connected society. He said, in particular, "Our social fabric is changing…[and] the arts have the power to unite our communities and anchor us to our core Singaporean identity."

This very important role of the arts identified by the Minister is something I absolutely agree with and cannot emphasise more. Considering the creative economy within this framework, which takes into account both the broader social impact of the arts as well its bread-and-butter concerns, I would like to highlight four areas in which more support can be rendered to assist artists and art entities.

First, more direct support can be put in place to assist creative workers, businesses and universities. This is a topic of pressing importance in the arts community. Just this past weekend, I attended a standing-room only panel discussion at 7879 Gallery & Clayworks. This is a space where many arts workers came together to discuss how to build sustainable art careers.

The Government, undoubtedly, has a very important role to play as a facilitator of assistance and networking space for creative businesses in the arts. Our Arts Resource Hub and grant framework under NAC are excellent initiatives, but much more can be done.

The Government may wish to consider the case study of Creative UK. This is an independent network for the United Kingdom's (UK) Creative Industries, which is partly funded by The National Lottery. It has set up a Creative Growth Finance fund, which provides scale-up financing for promising for-profit creative businesses in the country. It also works to connect potential investors with creative businesses, while educating arts entities to provide them with the necessary knowledge for securing various forms of investment – and these range from equity to debt and grants. It would be very helpful to have a similar centralised networking portal in Singapore for arts entities in order to help such entities gain access to potential investors.

Our local context also offers signposts on how affordable professional services may be rendered to suitable arts businesses and charities.

With my own personal experience serving as a volunteer with the Pro Bono SG office, I can share that Pro Bono SG has achieved some success with its low-bono initiatives under its Family Justice Support Scheme.

Here, legal representation at discounted rates is available for needy family law litigants who are not eligible for assistance from the Legal Aid Bureau. The benefits of this scheme are clear – subsidised legal assistance is given based on need. This creates greater access to justice but, at the same time, there is an element of sustainability, in that service providers are not left out-of-pocket either. I would like to ask the Government to consider building a similar pool or repository of "low-bono" service providers for creatives who are in the early stages of setting up their freelance activities, charities or small businesses.

A scheme like this could help arts and cultural workers and arts businesses to be "match-made" with key service providers, such as lawyers, accountants, technology experts, human resources (HR) professionals, marketers and more. Anyone who is willing and able to support the arts through the rendering of discounted services should be assisted with being given access to the entities that actually need this help.

Finally, we should not forget about financial aid for our tertiary institutions which educate artists and cultural producers. These need to be supported as well, so that our arts institutions are well-equipped with high-quality staff and programmes.

One example I would like to highlight today is the challenge that is presently being faced by the Nanyang Academy of Fine Arts (NAFA). NAFA is one of the founding members of the newly launched University of the Arts Singapore (UAS). Despite being an Institution of Public Character, NAFA does not benefit from the typical matched funding support provided by the Ministry of Education (MOE) to Institutes of Higher Learning (IHLs), and these include Institutes of Technical Education (ITE), polytechnics and autonomous universities.

Young autonomous universities, like the Singapore Institute of Technology (SIT) and Singapore University of Technology and Design (SUTD), are able to receive Government matching on public donations in ratios that can go well beyond simple dollar-for-dollar amounts. NAFA, being a private institution under UAS, does not enjoy the same privileges.

Instead, NAFA seeks dollar-for-dollar matching assistance for donations through the Cultural Matching Fund (CMF) and this is something that is overseen by the Ministry of Culture, Community and Youth (MCCY).

Since 2022, CMF rules have become much more restrictive. Amongst other conditions, CMF matching grants above the first S$300,000 per application window are now assessed on a project-by-project basis. What this means is that, in the last few years, NAFA has not been able to benefit fully from direct donation matching under CMF.

I also understand that this situation creates a disincentive for private donors to donate to the institution. And we can see why. It is because their donations are likely to have a bigger overall impact, if applied to, say, autonomous universities instead, where private donations will be matched in higher ratios by the Government.

The issue here is a simple one: without good and well-funded arts schools, we will not be able to produce good artists and cultural producers who are the very backbone of our creative economy.

In this regard, I would like to urge the Government to ensure that our new UAS as well as its member institutions are able to enjoy the same fundraising benefits as our other young universities in the country.

Next, Mr Speaker, I would like to address how we can do more to align the development of our arts sector with Singapore's larger economic goals and, in particular, with respect to our tax policies.

The first area I would like to highlight is in connection with the Goods and Services Tax (GST). Earlier this month, the hon Member Mr Sitoh Yih Pin talked about the GST "cow" being milked as a political tool, and I can assure this House that I have no intention of doing that today. All I would like to do is highlight that, in Singapore, we do not include the supply of artworks under the Fourth Schedule of the GST Act, which exempts certain transactions for the purposes of GST.

Hong Kong, by comparison, which is major art market in the region, does not have a regime of goods and services or value-added taxes. The result then is that it is often more cost-effective for art dealers to transact higher-value sales through Hong Kong than in Singapore.

In Singapore, local sales attract an additional GST charge. I have been told, anecdotally, that this has been a long-standing issue for art gallerists in the visual arts space, as it makes large art deals hard to conclude in Singapore.

A case can be made for the removal of GST in these instances; and it would not be the first time that this House and this Government would have granted such a thing. The provision of financial services, sales of residential properties and, more recently, supplies of digital payment tokens, are just some examples of transactions that are presently exempt from GST.

There are technical reasons why financial services are exempt from GST; many other jurisdictions offer this exemption as well. But I would like to highlight that in his 2012 Budget Statement, the then-Deputy Prime Minister and Minister for Finance, Mr Tharman Shanmugaratnam, introduced a GST exemption for investment-grade gold and other precious metals.

He recognised that this exemption would, "facilitate the development of gold trading, which can draw on Singapore's strengths as an international financial centre and trading hub, to meet strong demand for investment-grade gold in Asia." I think what we can see is that where there are wider economic aims to be achieved, tax exemptions may be harnessed as a useful tool to grow important industries.

The explanation for a GST hike next year is well-understood. But, as the examples I have raised show, where there are wider aims to be achieved, such as the health of our creative economy and the livelihood of our creative professionals, tax exemptions may well be harnessed as a useful tool to grow what Singapore believes to be important industries.

The Art Basel and UBS Survey of Global Collecting in 2023 states that art market sales, globally, reached an estimated US$67.8 billion in 2022. This was their second highest ever level. In its latest art market report, Art Basel and UBS noted that while performance was mixed across Asia for sales of post-war and contemporary art, Singapore was a notable exception.

In 2022, it showed double-digit growth. This growth was said to be driven by the Sotheby's sale of modern and contemporary art, its first auction in the country after a 15-year hiatus. ART SG, the leading international art fair for Singapore and Southeast Asia, will return in 2024 for a second edition after a very successful run this year.

The point I would like to make is this: Singapore is home to excellent galleries, they exhibit to an international audience and are making sales to reputable institutions all over the world. And so, the question to be asked is this: how can we scale this to our advantage and make Singapore a world-class art trading hub? A relook of our GST policy is, perhaps, one way to start.

Presently, the Government offers a 250% tax deduction for donations made to Institutions of Public Character, and these include many art charities. The deduction also extends to donations of certain types of artefacts and pieces of public art. This is extremely commendable and it is heartening that the incentive has been extended to 2026.

However, I would ask the Government to consider whether more dynamic incentives could be introduced, potentially those which can have more of a direct impact on working artists and on art consumption. In France, for example, a deduction is offered to taxpayers who purchase pieces of art made by living artists, provided that the artworks remain on display to the public or in places accessible to employees.

In Ireland, artists themselves can enjoy an exemption from income tax on revenue derived from artistic works which are deemed to be original, creative works and which are generally recognised as having cultural or artistic merit.

Tax policies, such as those I have just mentioned, are just a very small selection of the economic tools that we have to stimulate demand in our art market, and I hope that what I have mentioned today gives the House an idea of some of the ways that structural economic incentives can be considered to support our creative industries. I would like to urge the Government to consider these in more detail.

The next aspect of the creative economy that I would like to address, Mr Speaker, is the resilience and fortitude of the people who live and work in that economy.

One aspect of that resilience is the acquisition of a multidisciplinary skillset, one which enables artists to, in the words of the Arts Plan, "cross-pollinate" from within the creative economy to other adjacent industries. Sir James Dyson, for example, is an alumnus of the Royal College of Art in London and an excellent example of how an artistic background can inform pioneering achievements in other fields, such as engineering and design.

This multidisciplinary approach is something that is already being embraced by UAS. The hope here is that by creating more avenues for our arts practitioners to acquire multidisciplinary skillsets, we diversify the economic opportunities and jobs available to these arts practitioners.

This approach is absolutely spot on, but we should be careful to frame this narrative in a responsible way as we move forward. Many arts workers, and I count myself as one of them, we juggle portfolio careers to ensure that creative production is financially sustainable. This means taking on job after job after job, very often with little respite.

The result is often emotional stress, mental burnout and, eventually, attrition. People with talent, passion and potential will leave the industry because they are exhausted and simply cannot afford to be in it any longer.

In a paper released in February 2019, Danish economics Prof Karol Jan Borowiecki analysed census data in the United States, which went back to 1850. The study compared the socioeconomic backgrounds of artists and other creative professionals and found that, for every $10,000 in additional family income, a person would be around 2% more likely to become a creative professional.

So, in other words, the richer you are, the easier it is to sustain an artistic career. This is a situation we must try to avoid at all costs. Our arts producers must come from every sector of society, so that all types of subject matter and walks of life are well-represented.

It, therefore, follows that artists – all artists – must be able to earn a decent living from their practices. And so, how do we get there? Well, that brings me, Mr Speaker, to my last point, which is about education for art consumers.

For the creative economy to thrive, the audience must value the products created by artists. A common refrain that is heard amongst artists is why Singapore consumers will think nothing of spending thousands of dollars on designer handbags but will hesitate when it comes to spending similar amounts on works of local art.

Here, education for consumers is key. I urge the Government to remember that, in addition to schools and institutions, working artists and independent art spaces also have a key role to play in educating the public about why art is necessary and about what good art is.

The latest Arts Plan refers to the conducting of Data Insights Clinics for arts Self-Employed Persons (SEPs) and arts organisations, and this is so that participants would be able to better understand the preferences of different audience segments. While it is important for arts workers to produce works that are actually in-demand and will sell, we must not forget the value of the avant garde and the experimental in the arts.

These kinds of works push boundaries and play an important role in challenging and educating audiences on art and cultural appreciation. The Substation, for example, was and continues to be a safe space for experimental art to develop, although some might say its role is somewhat smaller now.

Independent art spaces, like Comma Space, Supper House, Starch, DECK and I_S_L_A_N_D_S Peninsula – these are just some examples of many, many small arts groups around that do important work. Entities like these do the hard work of developing young talents and more offbeat art offerings.

It is my hope that in our pursuit of a vibrant and sustainable creative economy, we do not forget to support – financially, if necessary – creatively rich spaces like these which sit outside of the mainstream. A vibrant creative economy is one that is not just lucrative for its workers but also one which retains its diversity, its heart and its soul.

To conclude, I would like to return to Mr Tang Da Wu's somewhat biting exhortation for Singaporeans to not give money to the arts. I hope I have been able to make a case today for us to not only give money to the arts, but to work towards developing a viable and sustainable ecosystem for artists and creative producers to flourish and thrive.