Award-winning fiction author Charlotte Wood, who claimed the 2016 Stella Prize, said funding for writers had in recent years reached "rock bottom".

The Commonwealth in June announced a $250 million package to help the arts sector survive amid COVID-19.

But a Senate estimates committee heard in October just $49.5 million had been allocated.

"The rescue package really has nothing for writers in it," Dr Wood told the inquiry on Friday.

"Writers are not attached to organisations, so the funding that goes to arts organisations doesn't go to writers.

"I don't know of any writer who has been helped by the COVID rescue package, except in terms of JobKeeper for their jobs which are not their writing jobs."

Catriona Menzies-Pike, editor of online journal Sydney Review of Books, said her organisation didn't meet the criteria for federal support because they're not "bums-on-seats".

"The funding made available to organisations presumed that organisations' income relied on ticket sales, people coming through the doors," she said.

"The way literary journals work is not by bringing people into a room.

"All of the writers with whom we work were desperately seeking any form of income to undertake paid work.

"All of their public speaking gigs had fallen through, the teaching had fallen through."

Ms Menzies-Pike said the application criteria was a failure and didn't consider the complex ways people consume literature.

She said looser criteria and subsequent funding would have allowed her to commission writers to do "a lot of work".

Author Helen Garner said funding for young writers was crucial to give them time and confidence to hone their craft.

"Before you can write anything worth the trouble, you have to do a huge amount of reading," she said.

"You have to soak yourself in language and you have to do a hell of a lot of thinking.

"Writing is a hard slog. I know that to an outsider a lot of what we do probably looks like bludging.

"It's a long game. It requires time and therefore it requires support."

Dr Wood said many writers were in dire economic trouble and relying on other work to survive.

She said Australia Council for the Arts funding for literature had fallen 44 per cent in the past six years.

Australian Associated Press