The arts sector is facing a significant drop in federal government funding as pandemic support measures come to an abrupt end despite some industries struggling to recover. The arts minister, Paul Fletcher, said the inclusion in the budget of an additional $20m in Covid-19 relief under the Restart Investment to Sustain and Expand (Rise) scheme in 2022-23, first announced last week, was an “unprecedented injection” of art stimulus funding. The $20m was on top of the original $200m originally allocated to the Rise scheme, which had enabled festivals such as Bluesfest and shows such as Come from Away to go ahead. The extra money was part of a $38.3m increase over the next two years announced in Tuesday’s federal budget for the arts sector, including $9m for the National Museum of Australia. But the Fund the Arts coalition said the budget papers revealed a $190m drop in funding to the sector, the equivalent of a 19% cut, in 2022-23 compared to the previous year. The organisation described the funding reduction as “horrific and highly disappointing” for an industry still recovering from Covid restrictions. The Monash University cultural and creative industries academic Dr Ben Eltham, who advises the Fund the Arts coalition, said the funding continued to fall over the forward estimates to 2025-26. The sudden drop is largely due to the winding down of the Covid-19 stimulus program for the arts, he conceded. “But the sector is still on its knees, with venues only just reopening and audiences still well below 2019 levels.” According to the budget’s forward estimates, funding to most of Australia’s national collecting institutions will drop by between 4% and 21% over the next five years. Funding to the National Library of Australia, for example, will drop from $61m to $47m by 2026. Sign up to receive an email with the top stories from Guardian Australia every morning Some cultural institutions will see small rises over the same period. Australia Council funding will rise by almost 4% to $230.8m in 2025-26; The National Film and Sound Archive budget will experience a 5% increase in funding to $31m in 2026. While Screen Australia appears to take a huge cut in 2023-24 – from $28m to $12m – the sudden drop is due to a two-year period of additional funding announced in the 2020 budget coming to an end. “This won’t impact our ongoing funding programs,” a Screen Australia spokesperson said. In an industry where an estimated $94m in income had been lost since July 2021, live music was expected to take many more years to recover. But in 2023-24, federal funding to Australian music, for example, will face a 20% cut. The industry’s peak body, Live Performance Australia, said the budget fell well short of supporting a post-Covid rebuild. “We were disappointed the budget does not provide more targeted support for those industries trying to rebuild after being disproportionately impacted by Covid,” the Live Performance Australia chief executive, Evelyn Richardson, said. “Targeted support to rebuild skills, and to underwrite and attract investment will enable us to create jobs, get our people back to work, more shows back on stage, our touring networks re-established, and our audiences back to live events.” Richardson said the live performance sector lost $1.4bn in revenue in 2020, and further significant losses were recorded in 2021 due to major lockdowns in Sydney and Melbourne. “We’ve also lost thousands of people across the industry and now face a severe skill and labour shortage, the worst ever experienced by the industry in living memory,” she said. “We’re grateful for the significant support the government has provided during the depths of the pandemic through programs such as Rise, but we now face a new set of challenges as we rebuild.” On Wednesday, Live Performance Australia repeated its call for the Morrison government to set up a temporary live entertainment events insurance scheme, similar to one the government set up for the screen industry. The $50m Temporary Interruption Fund, which has not been accessed by a single film or television production because it is only triggered when a production is forced to halt work due to Covid-19 infection, will be extended for a further six months to 30 June 2022.