New research has shown that music sales in the country are continuing to fall, while as many as one in four internet users access illegal music websites and services each month.
Australian Recording Industry Association (ARIA) CEO Dan Rosen told the Herald Sun that unauthorised downloading could cause permanent long-term damage to local musicians and the entire industry.
"Online piracy is still the biggest challenge we face as an industry,'' he said. "There's no moral justification anymore, everything is available digitally and legally, it's purely people stealing."
Rosen also revealed that ARIA is trying to seek help from the government as well as internet service providers to put a stop to pirated music, saying: "It's not about whacking people, it's about making sure they're aware they're doing the wrong thing and have an opportunity to change their behaviour. The government recognises that it's a legitimate issue."
Rosen said that the success of Adele's 21 album proved that people are willing to spend money on downloading decent music, adding: "Great artists put out great records, the appetite is there - that's the power of a great record.
"The success of the Gotye and Kimbra song ['Somebody That I Used to Know'] proves we can produce records in Australia that are successful internationally also."
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Watch the Brits performance of 'Rolling In The Deep' from Adele's album 21 below: