Summary and recommendations
CHAPTER 1: INTRODUCTION
The report is about user charges in museums, art galleries and national
parks (and to a small extent libraries), not the economics of heritage
conservation more broadly (such as historic building conservation). The
discussion of museums and national parks as `public goods' is not concerned
with how many of them the State should provide (which is the main focus
of most analysis in the literature of `public choice' economics); it is
concerned with how, given the present level of provision, the costs
should be apportioned between government subsidy and direct user contributions.
The effect of user charges on access and equity in the public library
system is an important topic on which the Committee received few submissions.
It deserves separate treatment.
RECOMMENDATION 1 (paragraph 1.25)
The Committee recommends that the Department of Communications and
the Arts, in consultation with State/ Territory authorities, local government
and relevant peak bodies, should sponsor research into the effect of user
charges on access and equity in libraries and archives.
CHAPTER 2: OVERVIEW
Defining heritage: `things we want to keep'
`Heritage' has been aptly defined as `things we want to keep' - things
that we have inherited, and wish our children to inherit in turn. Whatever
other value heritage may have (as a tourist attraction, for example),
we should never forget that the fundamental reasons for conserving these
`things we want to keep' are spiritual and emotional: a sense of belonging
and cultural identity, a sense of tradition, a sense of humanity, a wonder
at nature and oneness with nature.
`We can show them the heritage. We can show them song by song and tell
them how far they have to go with the song...We do not have paper. We
have stories.... They are the things that I teach my grandchildren to
memorise... You have to learn your culture properly.' (M Stuart, Central
Land Council, evidence 3 July 1997 p200)
If there is also commercial value so much the better - providing
it can be captured without detriment to the heritage values which are
the primary reason for conservation. Accordingly, in managing our heritage
priority must go to fundamental conservation goals. A percentage of cost
recovery from user charges may sometimes be possible without detriment;
but management must not be primarily about cost recovery.
The right of access to heritage
The view that heritage is `special' leads naturally to the view that
access to heritage should be a birthright of all. Heritage is about cultural
identity; cultural identity is intrinsically to do with group identity
and shared values; all Australians should be able to share. The
Committee agrees. Access to heritage is a right of all Australians.
Almost all submissions agreed: supporters of user charges invariably added
that charges should not be so high as to discourage visitation.
User charges in museums, galleries and national parks: the status
quo
The extent of `user pays' in national parks varies greatly around Australia.
The position is summarised in the APPENDIX 4.
In the case of museums and galleries, Australia Council surveys show
that the proportion of survey respondents that charged entry fees increased
from about a third in 1978 to about half in 1993. From 1988-89 to 1993-94
cost recovery from fees (including charges for special exhibitions and
special events), averaged over all surveyed institutions, has increased
from 6 per cent to 12 per cent for `larger' museums (30 or more paid staff),
and from 4 per cent to 9 per cent for `larger' galleries. See APPENDIX
5.
Overall, charging entry fees for `basic access' to museums/galleries
and national parks is not so much a `trend', with the connotation of inexorable
advance, but rather an option which some have embraced and others deliberately
rejected. Debate over its merits is still very much alive. However, charges
for `value-added services' are generally accepted. This raises the question
of where the boundary between `basic access' and `value-added services'
should lie.
Overview of submissions
Submissions did not divide into governments and management authorities
in favour of user charges, and user groups against. In relation to entry
fees, some site managers were in favour, some against; some government
agencies were in favour, some against; some non-government interest groups
were in favour, some against. Most who opposed general entry fees accepted
charges for value-added services.
Most submissions supporting user charges said they should be `modest'
so as not to discourage use, and accepted that in general we cannot expect
more than a small proportion of cost recovery through charges. Hardly
any ventured to suggest particular numbers. Given the diverse circumstances
of different places, this is prudent, and the Committee will not try to
suggest particular numbers either. It is the principles for decision-making
that are important: to set up arbitrary cost recovery targets is fundamentally
in conflict with the principle of setting charges for these public institutions
at a level that will not inhibit the public's use of them.
The submissions focused on major institutions in public ownership, and
had little information on heritage conservation in the private sector,
or on the `user pays' profile of the 1,500-odd museums and galleries in
Australia, mainly small local museums, which have no paid staff. The Committee
considers that smaller museums and galleries have an important place in
our cultural life and this omission is unfortunate. The Committee recommends
further research to fill this gap.
RECOMMENDATION 2 (paragraph 2.39)
The Committee recommends that the Department of Communications and
the Arts, in consultation with State/Territory authorities, local government
and relevant peak bodies, should sponsor research into the influence of
`user pays' on access and equity in the regional, local and volunteer-operated
museum and gallery sector.
CHAPTER 3: CONSTRAINTS ON ACCESS
Constraints on access to heritage other than price must be recognised.
Much heritage is in private hands, and is either inaccessible or, if accessible,
usually only at a price. Poorer people can't access as much as better-off
people. `Access to heritage' raises special problems for people with disabilities;
for country people; for less educated people; for indigenous people. If
we speak of `rights' in principle without acknowledging the limitations
of people's resources and opportunities in practice, we risk overlooking
the handicaps of disadvantaged people and the question of which rights
really need affirmative action in order to be exercised, and which people
can benefit from it.
CHAPTER 4: ENTRY FEES: ARGUMENTS OF PRINCIPLE
The most basic argument put by opponents of entry fees was `entry to
public property should be free of charge'. This is put first and foremost
as a value statement which seeks approval not by force of logic but rather
as a fundamental `right'. It was often allied with the argument that `we've
already paid for it through our taxes'.
The main argument put by supporters of entry fees is that, while it is
appropriate to fund these public facilities from general taxation in light
of their community/non-use benefits, it is also reasonable to charge
visitors for the private benefits associated with direct use. This argument
relies on analogy with the goods traded in private markets; but it raises
the question, are cultural goods different from day-to-day goods? Many
witnesses opposed to user charges felt strongly that museums/galleries
and (less often) national parks embody fundamental values which ought
to be left outside the market. To enter a community facility free emphasises
that it is ours, as a community; to pay emphasises that it belongs
to `the government' - the government as business proprietor. The difference
in attitude is fundamental.
Which places are our `civic temples', to which access should be free
as a fundamental value? The Committee suggests that at the least, the
key national and state museums and galleries - the flagship institutions
in each state which most symbolise the cultural role of museums and galleries
- should have free access. We refrain from making a similar recommendation
for national parks, mainly because to suggest a category of `key' national
parks creates too many difficulties. The circumstances of individual parks
are too varied. Entry fee policies for national parks need to be decided
on a case by case basis.
CHAPTER 5: ENTRY FEES: ECONOMIC EFFICIENCY ARGUMENTS
Museums, galleries and national parks are to a large extent `public goods':
once the place exists, no-one can be excluded from the community benefits
(conservation of cultural heritage, `intrinsic value' of nature conservation...)
which it provides, and which do not depend on visitation. They are usually
also `non-rival in consumption' - one person's use of them does not inhibit
other people's use. According to the conventional `marginal cost pricing
rule', this suggests that the economically efficient entry fee is zero
(some provisos are discussed in the main text). Where a fee is charged
for a non-rival public good, and discourages would-be users without any
compensating economy of running costs, there is a `deadweight loss' of
community welfare.
The Committee's evidence, though anecdotal, suggests that on the whole
museum/ gallery entry fees do significantly discourage visitation, causing
a deadweight loss of welfare which the Committee regards as regrettable.
In the case of national parks the position is less certain, and probably
varies much more from one place to another. The Committee recommends wider
research on this, which would plot the history of user charges against
the history of visitation to see what cause-effect relationship appears.
RECOMMENDATION 3 (paragraphs 5.115, 5.116)
The Committee recommends that the Department of Communications and
the Arts, in consultation with State/Territory authorities and relevant
peak bodies, should sponsor research on the relationship between user
charges and visitation in cultural institutions.
The Committee recommends that Environment Australia, in consultation
with State/Territory authorities and relevant peak bodies, should sponsor
research on the relationship between user charges and visitation in national
parks.
Where the marginal cost of admitting a visitor is practically zero, and
an entry fee significantly discourages visitation, entry should be free
on economic efficiency grounds whether or not it is also indicated for
emotional and symbolic reasons as suggested in chapter 4.
CHAPTER 6: ENTRY FEES: EQUITY ARGUMENTS
It is well known that museum/gallery visitors are drawn disproportionately
from the more educated classes (the position with national park visitors
is less clear). In light of this, supporters of entry fees argue that
free entry is an unwarranted subsidy from poorer non-visiting taxpayers
to richer visitors. Opponents argue that fees disproportionately discourage
poorer people, and that this is undesirable.
The last point depends on the price elasticity of demand broken down
by socio-economic grouping. While there is little hard information on
this, it seems clear that for museums and galleries occasional/potential
visitors - the main focus of attempts to increase visitation through access
an equity programs - are sensitive to price, and that for them
entry fees are a disincentive additional to other cultural barriers. With
national parks, again, the position probably varies greatly from one to
another.
In museums and galleries at least, charging entry fees is unlikely to
ameliorate any perceived equity problem. Visitation will probably drop;
the place will still require a large public subsidy (all submissions admitted
that fee revenue cannot usually hope to be more than a small percentage
of total costs); the profile of users will probably become even more `upper
class'; and because costs do not decrease in proportion to decreased visitation,
the public subsidy for each remaining visitor will probably increase,
frustrating the goal of reducing the `unfair' subsidy. This is not a sensible
outcome.
If we perceive an upper class bias in the socio-economic profile of visitors,
it would be better to take constructive steps to remedy it - the foundation
of which is free entry. If we wish to reduce the level of public subsidy
per visitor, we may search for means of doing so which do not jeopardise
the core goal of wide public access. Given the predominance of fixed costs
in museums and galleries, the most obvious way of reducing the subsidy
per visitor is to increase visitation; to exploit increased visitation
by charging for `value-added' services, which the Committee (with most
submissions, even from those opposed to entry fees) accepts; and to exploit
the favourable public image of a free-entry community cultural institution
to promote volunteer input and private sponsorship.
CHAPTER 7: USER CHARGES: ARGUMENTS OF DETAIL
Most submissions, even from those opposed to entry fees for `basic access',
accepted charges for `value-added services' (though it was not always
clear where the boundary between `basic access' and `value-added services'
should lie). It seemed generally accepted that these charges should be
based on marginal cost.
Supporters of user pays argued that user charges can fund better management;
opponents argued that it simply encourages governments to reduce central
funding correspondingly. The question suggests an obvious research program
to track the trend in user charging against the trend in budget funding.
RECOMMENDATION 4 (paragraphs 7.47, 7.48)
The Committee recommends that the Department of Communications and
the Arts, in consultation with State/Territory authorities and relevant
peak bodies, should sponsor research into the trend of user charges and
similar revenues versus budget funding among cultural institutions.
The Committee recommends that Environment Australia, in consultation
with State/Territory authorities and relevant peak bodies, should sponsor
research into the trend of user charges and similar revenues versus budget
funding among nature conservation agencies.
Opponents of users charges argued that reliance on the revenue risks
diverting managers' attention away from core conservation charters in
favour of revenue raising developments. The Committee shares these concerns.
We acknowledge that the evidence on this matter was anecdotal, and we
recommend wider research.
RECOMMENDATION 5 (paragraphs 7.77, 7.78)
The Committee recommends that the Department of Communications and
the Arts, in consultation with State/Territory authorities and relevant
peak bodies, should sponsor research on the relationship between user
pays policies and management emphases in cultural institutions.
The Committee recommends that Environment Australia, in consultation
with State/Territory authorities and relevant peak bodies, should sponsor
research on the relationship between user pays policies and management
emphases in national parks.
CHAPTER 8: CONCLUSIONS
In the Committee's view, user charges in museums, art galleries and national
parks may well be objectionable on symbolic grounds (chapter 4), economic
grounds (chapter 5) or equity grounds (chapter 6), depending on the case.
Where they pass these hurdles they are acceptable providing they
are managed so as to maintain wide access and to minimise the undoubted
risk of distracting managers from their core mission of conserving our
heritage for public enjoyment and for future generations. The main conditions
this suggests are:
It must be accepted that user charges can usually raise no more than
a small percentage of total costs. Budget funding for these public institutions
should ensure that total funding is appropriate to management needs; it
should not be tied to user charges revenue as a reward or punishment for
high or low revenue-raising.
Where there is a non-trivial price elasticity of demand (would-be
visitors discouraged by charges), suggesting that entry should be free,
free entry must be retained as a real option: charges for value-added
services must not become a proxy for entry fees.
Charges for non-commercial use of value-added services should
generally be based on no more than marginal cost recovery: public budgets
must acknowledge that the fixed costs of maintaining the resource for
future generations are a charge on the whole community.
For commercial users higher charges are acceptable (whether entry fees
or value-added charges) to the extent of a fair contribution towards maintaining
the resource from which they draw profit.
There should be suitable concessions for access and equity purposes.
Revenue should be retained locally to improve management.
Commercial development inside national parks should be discouraged to
prevent the creation of a cycle of dependence.
There must be orderly, open and consultative strategic planning to allow
informed community input to future directions for management and to avoid
the tyranny of little decisions.
`...The first in my family to graduate from college, I'd like to take
my kids to the museum; I mean more than once every five years. Once on
a sudden impulse while driving past the Museum of Fine Arts on a working
day, I felt like breaking out of the rat-race for half an hour... by myself...
I just moved along from picture to picture. It was like being in another
world. I couldn't believe it. All the worries left me. I got some distance
on my life. I felt like I was becoming - well, you know, a philosopher.'
`a young accountant', quoted in D. Thomas, `Access - the many kinds in
many minds', Museum National vol 2 no 2 August 1993
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