Removal of the long-standing 1% cap on copyright fees for sound recordings broadcast on air will put the sustainability of local regional radio stations at risk and may undermine attempts to increase financial support for Australian music artists, the commercial radio industry has warned.

Last week, Senator David Pocock introduced a private member’s bill seeking amendments to the Copyright Act that would remove the cap, which limits the amount multinational record labels, represented by the PPCA, can charge Australian radio stations for the right to broadcast their music.

Ford Ennals, the chief executive officer of industry body Commercial Radio & Audio, said rather than increasing financial support for Australian artists, as promised, the proposed removal of the cap could backfire by simply directing more money to the record labels while simultaneously undermining the health of the radio industry, which provides a major platform for Australian artists.

Ennals said the cap was established to provide a safeguard for local radio to ensure that fees collected by the PPCA did not rise to unsustainable levels.

“There are 260 commercial radio stations in Australia, 220 of these serve communities in regional and remote areas, providing hyper local news, entertainment, information and emergency warnings to listeners free of charge,” he said. “Without a cap, there is nothing to stop the PPCA and its members from increasing fees to levels that threaten the viability and quality of local radio services.

The radio industry provides significant indirect support to the Australian music as a free platform for 2.7 million Australian songs played each year, through support for new and emerging artists, and through the sponsorship and promotion of events.