4 October 2019
NSW Premier Gladys Berejiklian’s recent aspirations “to enhance Sydney’s night-life” has now been formally backed by the Final Report of the NSW Parliament’s Joint Select Committee into Sydney’s Night Time Economy. The Parliamentary endorsement of the substantial repeal of Sydney’s Lockout Laws by the Joint Select Committee is set to have a profound impact on the hotel market should the amendments formally pass. The revisions will influence the commercial viability of existing and proposed hospitality assets and assist with the creation of employment opportunities throughout the industry – providing a much-needed boost for the local economy. 

Since the introduction of the lockout laws, we have seen a significant reduction in incidents occurring in certain nightlife ‘hotspots’ – a key metric for the case to repeal several conditions within the current legislative framework. 

I believe hospitality operators and publicans have always been highly conscious of their social responsibility when it comes to alcohol consumption and I applaud both Premier Berejiklian and the Joint Select Committee for their open mindedness and proactive approach to ensuring Sydney’s nightlife and night-time economy have the ability to compete on a global stage.

If passed, the repeals will not only enhance Sydney’s standing on a global stage but add weight to further investment in the hospitality sector and drive tourism initiatives for the city. While this is certainly a cause for celebration for the industry, and particularly for the pub and bar operators within the Sydney CBD precinct, the lockout’s lasting effects will have to be carefully considered by operators.

Key industry bodies are looking to swiftly implement the committee’s recommendations by 1 January 2020 to take advantage of the peak New Year period.  However, there are two processes that operators need to be cognisant of:
  1. Bars and restaurants in the Sydney CBD will need to submit a development application to the City of Sydney Council to seek approval for extended trading to 2am. Approval will still be at Council’s discretion, with the process subject to trial periods to noise pollution and violent  behaviour during these extended hours.
  2. Venues with an existing liquor license may be required to apply to Liquor and Gaming NSW to change their liquor license conditions or apply for a trading authorisation to allow for any extended licensed trading approved by Council.

As such, licensees will still need to consider the costs required to implement these changes. The repeal of Sydney’s lockout laws is overall however expected to deliver significant operational benefits to local businesses.

The repeals include 40 recommendations designed to enhance the vibrancy of Sydney’s nightlife and encourage a greater diversity of late-night options not based around alcohol. The NSW Government has until March 2020 to provide a response. 

The strong recommendations are partially in response to a weakening night-time economy, highlighted by the stagnating number of accommodation and food service businesses in the Sydney CBD (see Figure 1).  A Deloitte Access Economics Report released earlier this year revealed that local Sydney CBD businesses are losing up to $16 billion per annum in economic activity (or a 37% decrease) as a result of current lockout laws enforced in 2014. 
Figure 1 – Number of small accommodation food and service businesses in Sydney-Haymarket-The Rocks SA2, June 09 to June 18: pre-lockout projection and actual

 graph hotels

Sourced from NSW Small Business Commission Sydney’s Night Time Economy (2019)

The recommendations to repeal a number of lockout laws will provide relief for hundreds of affected food and liquor venues across the Sydney CBD.  Key recommendations include:

  • Removal of liquor regulations: Some of the liquor regulation will be removed in the Sydney CBD, including Oxford Street.  This includes removal of the 1:30am lockout, the 3am cease service, and some of the restrictions around what drinks can be sold after midnight.  Current lockout laws are, however, proposed to remain within the Kings Cross Precinct. 
  • Amendments to small bar licenses: This will allow small bar licensees to operate a bar with an increased patron limit from 100 to 130 customers and extended standard operating hours under the license to 2am.  Small bars are considered a generally low risk model that offers a variety of unique options for patrons, while in turn supporting a diverse night-time economy.  
  • Appointment of new Coordinator: This will involve the appointment of an overarching Coordinator by a central agency of government.  In particular, the Coordinator will work with industries such as Liquor and Gaming NSW to advise on issues relating to the night-time strategy, licensing incentives and live music venues.  This will ensure streamlined governance and avoid duplication of unnecessary processes for licensees.