Fresh "vibrancy guidelines" will be introduced in NSW to make it easier for restaurants and bars that are a reasonable distance from homes to trade later into the night.
The changes come after a handful of residents successfully blocked a restaurant at Sydney's exclusive Palm Beach from opening in the evening, despite their homes being separated from the venue by a golf course.
Northern Beaches Council in March rejected an application from a newly opened restaurant, The Joey, to open past 4pm after residents living more than 500 metres away complained about potential noise from the licensed premises.
"It really has left people scratching their heads," Night-time Economy Minister James Graham told ABC Radio on Tuesday.
"They're having to turn people away."
A planned change in legislation, which has been approved by cabinet but is yet to be introduced to state parliament, will apply to bars and restaurants on land 500m or more away from a residential property.
Councils will have to consider a set of "vibrancy guidelines" when assessing certain applications to extend operating hours in those cases.
The guidelines will be developed alongside the state's 24-hour economy commissioner, Michael Rodrigues, after consultation with councils, stakeholders and the wider community.
"These guidelines will really spell out some of the factors that councils should take into account to look after neighbours, but also make sure they've got vibrant places," Mr Graham said.
"We really want to encourage councils to take charge of this."
The planned changes represent the latest foray into a regulatory overhaul by the state Labor government in a bid to revitalise NSW nightlife following the COVID-19 pandemic.
In October, reforms were introduced to make it easier for venues to host live events and more difficult for noise complaints to be used to shut them down.
At least five individual noise complaints have to be registered with Liquor & Gaming NSW before a venue can be asked to close.
"We've changed the sound and noise rules to say one serial complainer can't have a venue lose its licence," Mr Graham said.
"We cannot ask for a vibrant city and then close every venue that tries to do that."
The number of venues hosting live music in the state increased by 84 per cent since 2023, when pubs and clubs were allowed to extend trading hours if they hosted events.
