NSW Labor has promised $103 million over four years to revive the sector, if it wins the election on March 25.
"We're determined to make NSW the home of live music in Australia," Labor leader Chris Minns said from Sydney music venue the Lansdowne on Wednesday.
"Our creative people really write the soundtrack to many young people and older Australians' lives, but also ... tell the story of modern Australia."
Music had the potential to be an export industry for the state, but creators and executives needed government funding to flourish, Mr Minns said.
More than half the state's music venues had closed during the coalition government's 12 years in office, he said.
After the COVID-19 pandemic and harsh restrictions on venues in Sydney and Newcastle, only 133 music venues remain open.
Controversial laws, including 1.30am lockouts and drink restrictions were imposed across Sydney in 2014 in response to a spate of alcohol-fuelled violence.
The laws were repealed in 2020.
Noise complaint processes, also blamed for a series of high-profile venue closures across Sydney, will be streamlined under Labor's plan, with the party claiming seven agencies are responsible for noise complaints.
"A decade of lockouts and then lock downs have left the music scene teetering on the edge," Labor's spokesman for music John Graham said.
Labor's plan was designed after a 2019 parliamentary inquiry into music, which found the state's music ecosystem was "slowly disintegrating".
The plan aims to reinvigorate the live music scene and complement the federal government's $286 million National Cultural Policy, which looks to revive the arts sector.
Musicians KLP, Ngaiire, William Crighton and Charlie Collins joined the party at the policy announcement.
Funds will also go towards creating a new music-boosting body Sound NSW, to support local musicians in a similar way Screen NSW champions local film.
It will develop a decade-long Contemporary Music Strategy, mirroring plans in place in Victoria, South Australia, Western Australia, Queensland and Tasmania.
The body will also boost opportunities for Indigenous artists and build skills for technical workers and producers.
Labor wants to reform planning laws to protect existing venues and produce new places for live music.
Further reforms include minimum $250 fees for artists when taxpayer funds are used for an event and empowering the state's 24-hour Economy Commissioner to a statutory appointment and expanding his powers into Newcastle, the Central Coast and Wollongong.
Councils will also be provided with up to $250,000 to create a business case to consider creating permanent music festival infrastructure, in areas including Sydney, Parramatta, western Sydney and regional NSW.
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