Tauranga Art Gallery has been handed a financial lifeline by a city council decision to inflation-proof the gallery's annual grant from ratepayers.

 Tauranga Art Gallery director, Penelope Jackson, preparing an exhibition - File.

Tauranga Art Gallery director, Penelope Jackson, preparing an exhibition - File.

In an unexpected decision, the council voted 6-5 to ease the inflationary pressures which have been building on the gallery since council's contribution to operating costs was frozen at $847,000 three years ago. The gallery has been finding it increasingly difficult in the tough economic times to meet the target of funding 20 per cent of its operating costs as well as coping with inflation.

However, the council's decision stopped short of restoring an inflation allowance into the gallery's funding for the year starting July 1. Instead it will take effect next year.

The gallery was budgeting to run up a $100,000 deficit over the next three years, starting with a $32,000 deficit for 2012-13.

Councillor Terry Molloy's bid to inflation-proof the gallery's grant was supported by Mayor Stuart Crosby and councillors Larry Baldock, Tony Christiansen, Wayne Moultrie and David Stewart. Opposing were councillors Rick Curach, Bill Faulkner, Bill Grainger, Murray Guy and Catherine Stewart.

Cr Molloy argued it was all about fairness and balance, saying the funding imbalance for arts and culture was absolutely huge compared with what the council spent on sport and recreation.

Councillor David Stewart said that if the council did not restore inflation indexing, the gallery would run into trouble.

There seemed to be no end to the pattern of deficits and he hoped that putting inflation back into the grant would result in the gallery running its budgets appropriately.

Mayor Stuart Crosby said the inflationary adjustment would be on $847,000 and no catch-up was proposed for the four years that the grant was frozen.

Councillor Larry Baldock said the gallery was the only council-controlled organisation (CCO) whose grant was not inflation adjusted.

"It needs to be reinstated to make it equitable across the board."

Councillor Murray Guy said the upcoming CCO review could secure savings not just for the gallery but other council-controlled organisations. "We need to look at the other entities because there are savings to be made."

He urged the council to "keep them lean and keep them mean", saying the discipline produced great results.

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