Sydney CBD's small bars should operate until 2am with more patrons, inquiry finds

Small bars could soon operate until 2am in Sydney's CBD with an increased number of patrons as part of a suite of measures aimed at "diversifying the night-time economy".

A NSW parliamentary inquiry found small bars were a "a low-risk licensed venue model offering variety for the night time economy" and recommended licensing conditions be relaxed to make them a "more attractive" business model.

Small bars are viewed as adding a unique option for patrons, the report found.

In a report released on Monday, the inquiry urged the Berejiklian government to increase the patronage limit on small bars from 100 to 130 and to extend trading hours to 2am as part of the standard licensing conditions.

"Small bars are an example of a licensed venues which expand the options available in the night-time economy," the report by the joint select committee on Sydney's night-time economy said. "They are viewed as adding a sophisticated and unique option for patrons wanting a smaller or more 'low tempo' venue."

The recommendation was one of 40 made by the parliamentary committee, which also urged the Berejiklian to axe the 1.30am lockout laws and 3am end-of-service cutoff in Sydney's CBD, while retaining it in Kings Cross.

Increasing the patronage limit to 130 people would "encourage the growth of small bars and promote diversity in Sydney’s night time economy", the inquiry found.

It also recommended removing "high-risk licence fees for later trading from these
low risk venues".

The report cited data from Liquor and Gaming NSW, which found that the rate of assaults remained "consistently low" in venues in the Sydney local government area with fewer than 120 people.

"However, once a venue exceeded a limit of 120 an increased trend in alcohol-related violence became more evident," the report said.

The NSW Small Business Commission and the NSW Independent Bars Association both called for an increase in the patron capacity for small bars in submissions to the inquiry.

The report noted that the number of small bar liquor licences had more than doubled since 2016, after Liquor and Gaming NSW increased the patron limit from 60 to 100.

In total, the number of small bar licences in the Sydney CBD has risen from 10 in 2014 to 43 in 2019.