The federal government will deliver on its 2019 election promise, with a $20 million lifeline to be thrown to live music venues over the next four years.
In March last year, $30.9 million was allocated nationally to incentivise live music for venues and to help local artists expand into international markets.
The government announced this week that the first year of funding will assist live music venues to become operational following COVID-19.
Applications opened on Tuesday for grants of up to $100,000 to assist small-to-medium venues with infrastructure upgrades, the purchase of equipment, promotional expenses and artist fees.
Grants will also be considered for initiatives that deliver to multiple venues, such as expanded regional touring circuits and partnerships across venues or jurisdictions.
Music ACT director Daniel Ballantyne estimated about 20 to 40 Canberra venues would be eligible to apply for the funding, which he said couldn't come at a more crucial time.
"Few businesses have had their capacity cut as savagely as live music venues where attendance capacity isn't usually determined by floor space, it's determined by the number of exits you have," he said.
"Under the COVID restrictions of course it's based on social-distancing, so what that means is a small venue goes from 100 per cent capacity to 25 per cent capacity or less - even restaurants are doing better than that."
Mr Ballantyne said that during a recent forum attended by 13 venue owners to discuss the post-COVID-19 path to recovery, operators had proposed a rebate scheme for live music venues which would provide venues some assurances when booking artists.
Under the proposal, venue owners would be eligible for reimbursement from the ACT government to cover the cost of running a show at a quarter of its capacity, allowing them to better support artists.
The Basement owner Lance Fox said the funding announcement offered hope to the live music industry, and he believed it would help make performances financially viable for performers.
"The issue in the ACT is that there are not enough venues and venues are not necessarily able to be supportive financially to a lot of artists," he said.
Mr Fox said the high cost associated with putting on a show when compared to revenue from ticket and drink sales often meant Canberra bands performed for free.
"There was a culture in the ACT in the '80s and '90s where you could go out any night of the week and see an artist perform in many, many venues around Canberra," he said.
Mr Fox said the post-COVID-19 challenge was to "reinvent the wheel" so that midweek shows where people weren't there to drink were still financially viable.
He said prior to COVID-19 the Basement had worked hard to establish itself as a stop-off venue for touring artists who might be performing in Melbourne or Sydney on the weekends.
"Canberra, in its incredible way, had embraced that, and we were starting to see incredible turnouts on a weeknight," Mr Fox said.
"Now my belief is that I won't see an international band in our venue until late next year."
He said a lifeline for the ACT's music industry had to include change in policy when it came time for venues to pay their insurance, to avoid them calling it quits.
Mr Fox said to prevent unmanageable insurance costs a limited liability policy needed to be brought in, which would cap payouts at a manageable maximum.
"Not what the current situation is ... is somewhere between $25,000 and $20 million, meaning the only people who get wealthy are the lawyers," he said.
A statement from Arts Minister Paul Fletcher said live music performances contribute an estimated $15.4 billion to the Australian economy each year and create 65,000 full-time and part-time jobs.
The statement said this round of funding would prioritise small- to medium-sized venues which provide professional staging for original Australian live music, to support both emerging talent and established musicians.