In 2025, Writing NSW contributed to the NSW Government’s The Art of Tax Reform consultation, a national discussion examining how tax policy could better support artists and creative workers across Australia. The consultation formed part of broader conversations around the future of cultural policy as the Australian Government approached the midpoint of Revive, the National Cultural Policy. More than 300 submissions then informed The Art of Tax Reform Summit at the Sydney Opera House in September 2025, which brought together arts practitioners, government representatives, economists, donors and creative industry leaders from across the country.
Writing NSW’s submission focused on the specific economic realities facing writers, whose incomes are typically low, irregular and unpredictable despite the significant cultural and economic value their work generates. We advocated for reforms including exempting literary prizes and government-funded grants from income tax, and introducing a capped tax-free threshold for writers’ earnings, arguing that fairer tax settings are essential to the long-term sustainability of writing as a profession.
Read the full submission below.
SUBMISSION TO NSW GOVERNMENT CONSULTATION
THE ART OF TAX REFORM
FROM WRITING NSW
Introduction
Writing NSW welcomes the opportunity to contribute to the NSW Government’s consultation on cultural tax reform.
Writing NSW is the state’s leading provider of services to writers, including courses, seminars and workshops, writing groups, festivals and events, grants and prizes, and information and advice. A not-for-profit organisation formerly known as the NSW Writers’ Centre, we have been providing quality support to the writers of our state since 1991.
Our submission focuses on the specific needs of writers and literary creators. Writers are a vital part of Australia’s cultural fabric, providing not only books, essays and poetry, but also the narrative foundation for a wide range of creative industries that contribute significantly to NSW’s economy, including theatre, film, television, video games, podcasts, and other digital and performance media. However, current tax settings do not reflect the realities of writers’ working lives. With average creative incomes of just $18,200 per year (Macquarie University research, 2022), writers earnings are unsustainably low. Taxation arrangements can create unnecessary burdens and reduce the already limited resources available for creative work.
We propose reforms that would better align with principles of fairness, simplicity, cost efficiency, and sustainability while recognising the public value of literary work.
Context: Writers’ Economic Position
Writing is a profession of high cultural importance but low financial security. Writers’ earnings are:
• Low on average – far below minimum wage
• Highly variable – with years of little-to-no income, punctuated by occasional grants, prizes, or royalties, even for writers that are considered highly successful
• Lumpy and unpredictable – creating mismatches with tax systems designed for stable income flows
For example, a novelist may spend five years writing a book, earning almost nothing in that time, then suddenly receive a $30,000 literary prize. Under current rules, this income is taxed as if it were a single year’s earnings, despite representing many years of effort.
Such treatment not only reduces fairness in the tax system, but also diminishes the effectiveness of government and philanthropic investment in literature.
Proposal 1: Exempt Literary Prizes and Government Grants from Income Tax
Rationale
Prizes and grants are recognition of cultural contribution, not commercial transactions. Taxing them reduces their intended impact. For small-prize amounts, tax compliance also adds unnecessary administrative burden.
Australian precedent
The Prime Minister’s Literary Awards are given tax-free.
Recommendation
• Exempt literary prizes and government-funded grants from income tax.
For example, if a writer wins a major literary prize or receives a government grant, that money is taxed as income. A rare $50,000 prize might leave the writer with only around $32,500 after tax, even though the award is meant to support their creative work and may come only once in a career, and only for a fortunate few. Exempting literary prizes and government-funded grants from income tax would ensure the full value goes to the writer, allowing them to dedicate more time to writing rather than supplementing their income through other work.
This approach is both fair, ensuring awards achieve their intended purpose, and simple, as exemptions already exist for other prizes such as the Prime Minister’s Literary Awards.
Proposal 2: Introduce a Tax-Free Threshold for Writers’ Earnings
Rationale
A targeted tax-free threshold for income derived from original literary work would reflect both the low earnings of most writers and the high cultural value of their contributions.
International precedent
Ireland’s Section 195 of the Taxes Consolidation Act 1997 allows artists, writers, and composers to earn up to €50,000 tax-free, provided their work is original and of cultural merit. This has supported the long-term sustainability of Ireland’s literary and artistic culture.
Recommendation
• Establish a capped tax-free threshold for writers’ earnings.
For example, an Australian writer who earns $25,000 in royalties for a book should not lose a large share to income tax when this amount is already below the national minimum wage. A tax-free threshold would allow them to reinvest earnings into further writing, benefiting both their livelihood and Australian readers. Writers’ incomes are also highly irregular – a single book advance or prize might represent several years of work. A tax-free threshold would help smooth out the impact of these rare lump sums, ensuring that writers are not penalised for the uneven nature of creative income.
Conclusion
Fair taxation is a cornerstone of cultural sustainability. For writers, current tax settings create unfair burdens, reduce the effectiveness of grants and prizes, and undermine long-term career viability.
We urge the NSW Government to:
- Exempt literary prizes and government-funded grants from income tax.
- Introduce a tax-free threshold for writers’ earnings.
These reforms would have a modest cost to government revenue but a transformative effect on the sustainability of writing as a profession. They would directly support the creation of Australian stories, ensuring that our literature continues to enrich our state’s public life, drive our creative industries, and enhance our national identity.
Writing NSW thanks the government for considering this submission and is ready to provide further consultation as required.
August 2025