“Festivals organisers are battling increasing costs, changing audience demand and uncertainty related to weather,” Graham said.

“In NSW and Sydney, there is a shortage of affordable outdoor spaces for festivals. We are working closely with the sector and across government on a review of the Music Festivals Act and on ways we can unlock more spaces for live music to thrive.”

Centennial Park, along with the Domain and Callan Park, has been identified as one of the few suitable greenfield sites for outdoor music festivals in central Sydney with good public transport links.

Event manager of Good Things Festival coming to Centennial Park in December, Dave Rubin, said the parklands were underutilised because of worries about noise complaints.

“The park is allowed eight events as it is but operates three or four across the year. Why? We know the answer is the concerns of residents,” he said.

“When you live on the boundary of the park, sure you don’t want to have events on your doorstep but the city suffers – especially when nearby Moore Park is ruled out as a greenfield site. We have such a lack of these spaces and Sydney should be a city where live music can be enjoyed by all.

“We would support the parklands’ authority offering up the parkland to more events in a responsible manner adhering to environmental rules and spread throughout the festival season.”

NSW has the highest venue and police user charges in the country, AFA chair Adelle Robinson said. Fees were up to 12 times that of other east coast capitals.

The founder of Listen Out, a touring festival of hip hop, indie and electronic music, Robinson said the police bill paid by event organisers cost $221,000 in Sydney compared to $47,000 and $48,000 in Melbourne and Brisbane respectively.

Centennial Park attracts a “usual venue hire fee” of about $200,000 and in some cases requires organisers to provide a percentage share of ticket sales, food and beverages and merchandise sales to its trust, she said.

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AFA has also expressed an interest in ramping up festivals in the inner-city Callan Park, included in the regulation review, saying it was a way for the state government to “quickly and easily show its support to assist the recovery of the industry”.

Rubin said Good Things had recently explored expanding its festival at Centennial Park from one to two days to make it more commercially viable due to high venue costs.

Despite the goodwill of Greater Sydney Parklands (the agency responsible for Centennial and Callan Park), the idea did not move forward due to concerns around noise complaints and the impact on turf, Rubin said.

Planning Minister Paul Scully confirmed the regulation governing the Centennial Park cap was now up for review.

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