Arena Theatre Company is searching for new avenues of income after missing out on funding from the federal government's Australia Council latest round of Four Year Funding.
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Executive director Sharon Custer said the company would face cutting back its program without securing new funding.
She said Arena had asked for $300,000 per year in funding for the 2021 to 2024 period.
"We will need to revise our strategic plan for the next four years," Ms Custer said. "It's hard to say categorically what we might lose.
"Essentially it might come down to which parts of our models are self-sustainable and which rely on funding. That's the job we have ahead of us."
Ms Custer said Arena Theatre Company wasn't the only youth-based company in the country to lose Australia Council funding.
"It's been a complete decimation of the youth arts sector," she said. "A lot of similar companies in other states been de-funded. Victoria now has no funded theatre companies for young audiences.
"It's a big oversight, I think, in terms of how do we nurture the next generation if we're not making theatre for and about them."
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Ms Custers said the decision to de-fund so many youth theatre companies given drama and the arts was being taught more in schools.
"The public seem to have a different opinion," she said. "(They) seem to value performing arts for young people more and more. They understand value of that but fed government doesn't.
"We are still 100 per cent committed to the young people of the region. We're grateful for the support of the City of Greater Bendigo and will fight to death and do everything we can to keep delivering what we started here."
The 55-year-old Arena Theatre Company relocated from Melbourne to Bendigo in 2018. It is Australia's longest running professional theatre company creating original work for young audiences.
Since arriving in Bendigo supported by Creative Victoria, Arena has won a Helpmann Award and two Drama Victoria Awards for its production of Robot Song.
Robot Song has toured internationally to America, China and the United Kingdom.
Arena has also collaborated with local schools to provide arts programs.
"Making original work is an essential part of communities coming to understand who they really are," Arena's artistic director Christian Leavesley said. "It enables us to own our problems and celebrate our triumphs.
"For young audiences in particular, it empowers them to imagine what their future lives might be, and also what the future of their communities and country might be.
"It is deeply disappointing and frighteningly short- sighted that this work is not valued by our federal government."