NSW Premier Gladys Berejiklian says her government will look to find balance between safety and a vibrant nightlife after a parliamentary report recommended Sydney CBD lockout laws be scrapped.
The report by the Joint Select Committee on Sydney's Night-time Economy advises the coalition government to lift the 2014 laws in the CBD, saying they cost NSW $16 billion a year.
But the report, released on Monday, says the Kings Cross party precinct is "not yet sufficiently changed" to warrant the removal of lockout laws and the issue should be revisited in 12 months.
Ms Berejiklian earlier this month said she supported scrapping the laws and hoped to amend legislation by the end of the year.
She said on Monday her government would respond to the report shortly.
"We always need to find the right balance between community safety and boosting the night-time economy," Ms Berejiklian said in a statement.
The report found the February 2014 laws were both necessary and effective to rapidly reduce inner-Sydney alcohol-fuelled violence following the one-punch deaths of Thomas Kelly and Daniel Christie.
But it argues the laws, involving a 1.30am lockout and 3am last drinks, have damaged Sydney's night-time business and culture.
The report recommends the CBD - including Oxford Street - have lockout and last-drinks laws repealed, as well as the prohibition on shots after midnight.
It also recommends trading hours for bottle shops be extended from 11pm to midnight from Monday to Saturday, and from 10pm to 11pm on Sunday.
"Safety and a vibrant night-time economy should not be, and are not, mutually exclusive," NSW Liberal MLC and committee chair Natalie Ward told reporters.
"We can have a vibrant night-time economy, grab that $16 billion and make it ours. We can do it holding hands with safety for the community."
The report found more work was required in Kings Cross to ensure safety, with the district requiring a "specific, nuanced approach".
It says the repeal of lockout laws in Kings Cross, without improvements to lighting, street layout and venue density, would prompt a return to excessive alcohol consumption and violence.
A "pathway" program is recommended to help diversify Kings Cross and dilute the number of bars and clubs in close proximity, with a review of the laws for the area in 12 months.
Sydney Lord Mayor Clover Moore said in a statement she welcomed the inquiry's recommendations and hoped they would "breathe oxygen into Sydney's nightlife".
Bar baron Justin Hemmes told the inquiry Sydney had suffered a significant decline in its vibrancy and become a "ghost town" at night.
"With the imminent completion and launch of Sydney's CBD light rail project and the pedestrianisation of George Street, we have an unprecedented opportunity to initiate a rebirth of our inner city and put it back on the international map," the Merivale boss said in a statement.
But Foundation for Alcohol Research and Education chief executive Michael Thorn said the recommendations put profit ahead of safety and were a "reckless capitulation to the alcohol industry".
"The premier must understand that in the future every death from alcohol-fuelled violence in Sydney will be on her head," Mr Thorn said.
St Vincent's Hospital also warned of renewed alcohol-based violence.
Among other recommendations are the appointment of a "night time co-ordinator" to enable stakeholders collaborate on safety, as well as the creation of a working group - including police and medical groups.
The Bureau of Crime Statistics and Research in August found non-domestic assaults dropped 53 per cent in Kings Cross and four per cent in the CBD since lockout laws were introduced in 2014.
But in the same period, assaults rose by 30 per cent at alternative nightspots.
Australian Associated Press