The Australian Greens say the Minister for the Arts, Senator George Brandis, is engaging in political interference in the arts by threatening to withdraw funding.
"The Abbott government is trying to bully artists and the Australia Council because it can't handle criticism of its cruel refugee policies," Australian Greens Leader Christine Milne said.
"The arts should be completely free from political interference and the Abbott government's move to censure the Australia Council with threats and reviews is directly at odds with this.
"The Greens will block any moves to require artists to take corporate money regardless of the ethical considerations involved.
"Senator Brandis is trying to dish out heavy-handed punishment to the arts community for speaking out on what is an immoral and cruel asylum seeker policy.
"The arts community is not the personal play thing of the Minister and moves for retribution, and silencing of artists, will not be tolerated."
This is a throwback to the Howard years when a Wagga Wagga gallery's funding was threatened, when it exhibited art critical of the treatment of refugees.
"Senator Brandis already tried in the last parliament to give the Arts Minister political power over the Australia Council and it was rejected in the Senate. This is just his latest attempt to wind back the independence of the arts community," said Senator Milne.