Loading

For months, executives of the 153-year-old gallery have been discussing its operating budget with Graham and senior bureaucrats.

Graham said the government had been carefully examining funding for the Art Gallery as well as the Museum of Contemporary Art, which is looking at reintroducing admission fees.

“The government has a clear three-step process for funding requests from cultural institutions: we will assess, audit and assist where required,” he said.

“They can expect an open ear, but also forensic accounting in relation to their expenses and the governance if they have run into financial trouble.”

Graham confirmed the $12.1 million allocation to the Art Gallery of NSW, in addition to the gallery’s budget set last year.

“A review into the current financial situation is under way and initial meetings have occurred. I am expecting a brief in coming weeks,” he said.

Sydney Modern, adjoining the gallery’s historic sandstone building, has attracted more than 2 million visitors since its opening.

The expansion almost doubled exhibition space and created a prominent new destination for Aboriginal and Torres Strait Islander art.

The state budget – the first for Labor since it returned to power after 12 years in opposition – allocated $40.6 million for the gallery’s running costs in the 2023-24 financial year, compared with $43 million allocated the previous year when its new campus had been opened for half the year, Brand told budget estimates.

Loading

The government also had applied an “efficiency dividend” of about $3 million, as in previous years. An efficiency dividend represents an effective cut to funding.

The gallery had agreed to raise $40 million from its two gift shops, restaurants, private functions and box office to boost its bottom line in the current financial year – that is four times the revenue it raised in 2022-23.

“The Art Gallery believes it has arrived at a sustainable budget outcome subject to the outcome of our ongoing discussions with the government,” a gallery spokesperson said.

“This will ensure we can continue to deliver exceptional exhibitions, programming and services for audiences now and into the future.”

Find out the next TV, streaming series and movies to add to your must-sees. Get The Watchlist delivered every Thursday.