Arts Minister George Brandis is standing by his decision to take $104.8 million from the Australian Council to fund his own hand-picked National Program for Excellence in the Arts, saying that “only the mediocre” have anything to worry about. But the new “excellence”-based approach, which primarily funds 28 major companies, denies a simple fact: that small-to-medium companies provide the training ground from which the 28 majors draw their talent. Brandis’ assumption that size and profile equals excellence may have disastrous implications for the confirmed high quality of the arts in Australia.

Take Red Stitch Theatre Company. Founded 13 years ago, this is Australia’s leading ensemble theatre company, with a focus on contemporary multi-platform artists. The company actively seeks collaborations with actors, designers, playwrights and organisations, and has been producing award-winning theatre for more than a decade, including Red Sky Morning and The Flick.

Numerous actors in the front rank of Australian theatre have a Red Stitch production in their CVs. Later this month, for example, Malthouse Theatre Company will premiere a new Antigone starring Emily Milledge, whose most recent major role was in Red Stitch’s 2014 world premiere production of Out of the Water.

For many, a Red Stitch production is one where their talents come to full maturity before they move up to major roles in one of the 28 companies in the NPEA group. But Red Stitch is another company facing uncertain times, as one of the 145 companies facing cuts, to the general bewilderment of the arts community.

Small companies also provide the personnel who steer big companies. Take Debra Batton as an example. She’s been stage director of Circus Oz since March last year. One of the world’s leading circuses, Circus Oz began as part of the Pram Factory theatre movement in Melbourne.

Batton began her apprenticeship at Legs on the Wall, a leader in Australian circus, theatre, and dance, in 1996, and became artistic director for the company in 2001, creating productions such as “Runners Up”, “Eora Crossing”, “On The Case” and “Beyond Belief”. Legs on the Wall is  another of the 145 companies waiting for the axe to fall from Brandis’ cuts.

But it’s companies like Black Swan State Theatre Company that are under the greatest threat. Western Australia’s flagship theatre company and one of Australia’s most prominent theatre companies, Black Swan State is known for a unique take on international theatre classics and the indigenous Western Australian culture.

With Black Swan’s major focus on emerging artists through touring and workshops, there is a strong relationship between the company and small-to-medium companies, including those under threat from the cuts.

As well as taking performers from Red Stitch and Griffin Theatre Company, Black Swan makes links with specialist companies such as Urban Theatre Projects, a Sydney company focusing on current Australian issues and contemporary storytelling, and Barking Gecko, a Western Australian company specialising in creating productions for young people. Both of these companies are under threat.

Of course, the purpose of the small and medium theatre companies isn’t primarily to supply talent to the majors but instead to offer Australians the wider possible experience of theatre, and to give talented people with ideas scope to try different ways of practising an ancient art.

But even by Brandis’ reductive logic of “excellence”, reducing funding to 145 small groups, almost 30 of them theatre companies, is undermining the very pursuit of excellence he celebrates. There are few directors, actors or performers with inborn genius, and no amount of training or study will substitute for that crucial element of creative growth: real performances before real audiences in real time. Brandis is winnowing the grassroots from whence the tall poppies grow — with the usual results.