“We always need to find the right balance between community safety and boosting the night-time economy,” Ms Berejiklian said.
A government source said the recommendations needed to be considered by cabinet and, if adopted, would require a combination of legislation and regulation.
But it is likely that legislation to repeal the laws will go before Parliament in November.
Bans on selling shots and other high-alcohol content beverages after midnight should also be lifted, the committee found, along with glass restrictions. It also recommended trading hours for the sale of takeaway alcohol be extended by one hour to midnight Monday through to Saturday, and to 11pm on Sunday.
Small bars should also be able to operate with a patron limit of 130 instead of 100, and stay open until 2am, the committee said.
The joint select committee on Sydney’s night-time economy, which released its report on Monday, made 40 recommendations after receiving more than 800 submissions.
All members of the committee, made up of MPs from the Liberals, Nationals, Labor, the Greens and One Nation, supported the repeal of the lockouts in the CBD except Riverstone MP Kevin Conolly.
The Liberal MP, who had threatened to defect to the crossbench over abortion law reform, said he did not support changes to the laws because his “primary focus is on public safety”.
The committee chair, Liberal MLC Natalie Ward, said the introduction of the laws five years ago had been an “appropriate circuit breaker” and had been successful in reducing violence. But Sydney had changed since the laws were introduced, Ms Ward said.
“Sydney is not the same city it was in 2014,” she said. “Safety and a vibrant night-time economy should not be, and are not, mutually exclusive.”
Ms Ward said a revitalised Sydney nightlife should not be reliant on alcohol, adding she wanted everyone to be able to enjoy the CBD in a “safe, fun and vibrant atmosphere”.
The committee also cited analysis provided by Deloitte Access Economics that Sydney may have been forgoing $16 billion of potential economic activity by not taking full advantage of its night-time economy.
The Australian Hotels Association NSW said the report made “common-sense recommendations” that would enchance Sydney’s nightlife.
But emergency service workers and doctors at St Vincent’s Hospital in Darlinghurst warned that changes to the laws could lead to a return to the “brutal” conditions of 2014.
“This [hospital] was a very brutal place in 2014,” said Paul Preisz, the director of emergency at St Vincent’s.
“Some of what we were seeing was life-changing violence, we saw deaths of young people that we haven’t seen since the laws came in and we would hate for this to come back.”
There has been a 25 per cent drop in emergency department presentations related to acute intoxication between 2013-14 and 2017-18, according to the hospital’s data.
Associate Professor Preisz said that while Kings Cross and the CBD were “complex environments”, changing the availability of alcohol had been the single biggest factor in reducing incidents of violence and harm.
The head of advocacy group Foundation for Alcohol Research and Education, Michael Thorn, also warned that changing the laws would coincide with the more dangerous summer period.
“Alcohol-related harm increases over the summer, and acting rashly would simply accommodate the alcohol industry and allow it to leverage its most lucrative season,” he said.
The committee’s deputy chair, independent MP Alex Greenwich, urged the government to move on the recommendations as soon as possible.
“It’s my hope that by Mardi Gras 2020 our night-time economy will once again be flourishing and fun,” he said. “Good things can happen after 1.30am. I met my husband on the dance floor in a gay bar on Oxford Street. With the repeal of the lockouts, I hope others in Sydney will be so lucky.”
Mr Greenwich said he would like the lockout laws to be axed in Kings Cross in the future.
Labor welcomed the changes to venues in the CBD but its spokesman for music and the night-time economy, John Graham, said the reforms should be done in stages and Kings Cross “cannot be allowed to return to how it was”.
Alexandra Smith is the State Political Editor of The Sydney Morning Herald.
Education reporter at The Sydney Morning Herald