The move -- mooted in a discussion paper canvassing possible changes to the Copyright Act 1968 -- is covered under a proposed 'fair use' clause covering copying of content for personal use. It would also apply to movies and the recording of television programs for later viewing.
However, the Australian Recording Industry Association (ARIA) has already signalled its opposition to a radical reworking of the legislation. It said the Copyright Act "generally doesn't need any changes". Other respondents included music industry activist Phil Tripp, who is pushing for a levy on on digital music players and audio-capable CDs in return for increased copying rights and independent music labels, who want compensation if the fair use clause is enacted.
The government's paper discusses enacting a specific exemption for "format-shifting," or the copying of copyright material from one format to another. It also sees an increasing range of copyright material being used by way of mobile phones.
The Joint Standing Committee on Treaties (JSCOT) and the Senate Select Committee proposed in the paper that format-shifting for personal use "should not be an infringement of copyright".
The paper also examines whether the Copyright Act should be amended to include specific exemption for making back-up copies of copyright material other than computer programs.
The current Copyright Act contains an exception that allows users to make back-up copies of computer programs in certain specified purposes. However, it does not include copying of other copyright material associated with computer programs such as images, sound recordings and cinematograph film.
The exception was based on the consideration that computer programs may be more likely to be corrupted.
"These considerations do not necessarily apply to other copyright material, such as commercially made CDs and DVDs which may not be as easily damaged by normal use in a player," the paper said.
The government is also asking whether a "statutory licence" for private copying should be incorporated in the Copyright Act, and if so, for what materials and under what circumstances. It canvasses the adoption of a levy to compensate owners for lost sales, but notes this has divided the industry.
According to the paper, statutory licensing was previously raised as a solution to the private copying of music. In 1989, a blank tape royalty scheme was added to the Copyright Act which permitted the copying of sound recordings on black audio-tape for private use.
However, in 1993, the High Court determined the proposed levy was a tax and cancelled the scheme.
The paper said a statutory licence may not necessarily give consumers the opportunity to make private copies, especially with technological protection measures placed on some music CDs and audio-visual DVDs.
Tripp has been lobbying for close to two years to see the laws changed. He told ZDNet Australia  his proposal would include a levy on digital music players and audio-capable CDs.
"It's vital that consumers understand that music is not like tap water. It comes at a premium. People must realise that music has value and copying that creates a need to compensate someone for sharing that music," he said.
Tripp said he had been meeting with government representatives to push for consumers to be able to privately copy their own purchased music and for the songwriters and music creators to get "fair compensation for the copying of their music."
"Fair use by consumers should also mean fair pay for the creators, which is fair play. It needs to be done now. Although the copyright law served us well over the years, it is always behind technology. It used to be incrementally behind but with the advances of technology, it is now a generation behind," Tripp said.
Stuart Watters, chief executive officer of the Association of Independent Record Labels, said the organisation would focus on compensation for his members if the fair use clause is put in place.
Watters said they could not fully support the levy scheme suggested in the paper unless it is certain that there is adequate way of distributing compensation.
"The issue is in terms of any compensation process put in place. It needs to take into account the needs of the independent sector in terms of how the distribution of income is reached and in terms of how the government might choose to collect and distribute any income.
"We can't say we support [the levy scheme] at this stage, but it is in our radar. It is a system that is in place in many countries around the world but some of the responses from some of our counterparts is that they don't really benefit from the scheme. It would need to be thoroughly examined as an adequate way of redistributing compensation to copyright holders," Watters said.
The government is inviting interested parties to give their submissions by 1 July 2005.