More than 60 Australian arts companies that previously received Federal Government support have had their latest funding applications rejected, leaving a lot of them facing uncertain futures.

Key points: Grants for 62 previously funded arts companies and organisations rejected

Grants for 62 previously funded arts companies and organisations rejected Cuts mean jobs would be lost and career opportunities would disappear, says LPA chief

Cuts mean jobs would be lost and career opportunities would disappear, says LPA chief CAST has called for a formal Government review into the funding cuts

Sixty-two small to medium-sized arts companies and organisations that had previously been funded by the Australia Council for the Arts have been told their applications for grants for the next four years have been rejected.

While more than 40 new organisations have been given grants, industry insiders said Friday was the blackest of Black Fridays for the arts in Australia.

The cuts follow the funding cuts of $60 million over four years stripped last year from the Australia Council's budget.

Of that $60 million, $12 million per year has been diverted into the Government's new Catalyst arts funding program.

Cuts will 'have flow on effects right across industry': LPA

Kath Melbourne, executive producer of Sydney-based physical theatre company Legs On The Wall, told PM the Australia Council for the Arts had rejected their application for ongoing funding.

Ms Melbourne said the news was "gobsmacking" for the company that has been operating for over 30 years.

"I didn't have any words. It was a very big shock, considering that the company is in a period of growth and vibrancy at the moment with what we're doing," she said.

"We didn't get a reduction in our ask, we didn't get some shaved off, we were simply awarded zero dollars."

The theatre company still has smaller income streams but has relied on the Australia Council to provide close to $200,000 per year.

"We simply don't have the capacity to raise that so that means we have to sit down over these coming months and make some very difficult decisions, both about staffing and our artistic program," she said.

The literary journal Meanjin, founded in 1940, has also been left in dire straits.

The funding cut is also likely to be the death knell for Adelaide's Slingsby Theatre Company. Artistic director Andy Packer said it was knocked back over its request for $225,000 annually for the next four years.

"It is quite likely that on December 31 this year we'll wind up the company, so it is quite dire," Mr Packer said.

He said the company already used its funding wisely.

"We're very lean from the administrative point of view — that allows us to put all of our resources into artists and to making and touring work," he said.

Live Performance Australia (LPA) chief executive Evelyn Richardson said the cuts meant jobs would be lost and career opportunities would disappear.

"We're very concerned, and not just for small to medium companies," Ms Richardson said.

"This will have flow on effects right across our industry to our major companies, to our commercial companies. We're particularly concerned about losing our creative and technical talent who may be forced to go offshore for work or career development opportunities."

Calls for rethink amidst fears of mass job losses

The Confederation of Australian State Theatre Companies (CAST) has released a statement calling for a formal Government review into the funding cuts.

CAST spokesperson, Bell Shakespeare Theatre company's Jill Perkins, said it was a confusing and upsetting time for people in the arts industry.

"It's important to look at the sector as a whole. We're only as strong as our colleagues — if there are less opportunities for employment then people will understandably seek other careers to carve out a living for themselves," Ms Perkins said.

"Perhaps some people don't realise that artists and art workers sort of stitch together a career and a year's annual income by working in all sorts of companies. So if a part of that falls away then suddenly your potential to earn a living is severely compromised," she said.

"It's interesting that this Government recognises innovation and wants to invest in creativity — Mr Turnbull said that we are a creative and imaginative nation.

"I guess I would ask: 'How is that being demonstrated in the latest budget and indeed in the rhetoric coming from government?"

The Australia Council told 7.30 the companies that missed out on the funding would have other opportunities to gain financial support.

"No company has been de-funded," Australia Council chief executive Tony Grybowski said.

"Those organisations not successful in the four-year funding will have exclusive access to our project grant round.

"It is a competitive process, we had some 260 applications and this week we announced 128 companies which will be successful in that round.

"There are great organisations that haven't been successful in this round."