Tomorrow, the shortlist will be announced for the biggest prize in Australian literature, the $60,000 Miles Franklin Award.
The winner is likely to hand over at least a quarter of their winnings to the tax office.
Ironically, if someone backs the winner with a bookmaker, even if they won $60,000 on the bet, their winnings would be tax-free.
Similarly, if they won a raffle or pokies jackpot, the tax office would not take a cent.
The new analysis, Highly Prized: It Is Time to Make Art and Literature Prizes Tax Free, argues there would be enormous artistic and cultural benefit if the government made the prizes awarded to Australian writers, painters, playwrights and artists from other disciplines tax free.
"Taxing art prizes makes no sense," said Alice Grundy, Research Manager at The Australia Institute and Managing Editor of Australia Institute Press.
"It raises hardly any revenue, and it stifles the creativity of some of the nation's greatest artistic talents.
"If you win the lottery, Who Wants to be a Millionaire or The Block, you don't pay tax on your prize money. Win the Stella Prize for writing by Australian women, and you pay tax. Win the Archibald prize for painting, pay tax.
"The median income for Australian authors is $32,760, which is below the poverty line.
"Winning a prize buys precious time so our best artists can take time away from their second and third jobs, and produce their next masterpiece."
