The company has a deficit of A$600,000, due to, among other things, low box-office sales from two of last season's productions, and there are rumors that the board of directors has threatened to resign if the financial problems cannot be worked out. The company denies these rumors.
Months of negotiations, however, have not produced a financial plan that would allow the company to continue as it is.
According to the Herald, if there is no government bailout, the company would likely no longer be able to afford about half its dancers, or its star choreographer, Graeme Murphy.
Junior arts minister Rod Kemp has said that the government supports the company, and that he hoped to make it possible that "the art of Graeme Murphy will continue to be seen by many Australians."
Mel Ward, the arts council's performing-arts board chair, said that the Australia Council cannot bail out the company, but can help it make a transition. Leigh Small, the company's general manager, confirmed that the performing-arts board had put up money to secure the company to the end of the year.