THE Australian Hotels Association is sceptical about lockouts in the Sydney city centre and mandated "last drinks" at 3am, announced by NSW Premier Barry O'Farrell yesterday.

The organisation expects the call of last drinks in the early hours to push the intoxicated crowd out to the street.

"We do not believe tens of thousands of people will stay in licensed premises past 3am once alcohol is no longer served, but will instead be out on the streets looking for a way home. The government will need to address this new issue. "

Premier O'Farrell defended his decision, claiming partygoers will not be forced onto the street and can remain in venues.

"People will still be able to dance the night away but they'll be drinking water and soft drinks," he told radio station Kiss FM.

He also addressed the issue regarding a lack of taxis at 3am, saying buses will be readily available and the government will continue to focus on ensuring the required amount of vehicles are on the road.

"We're making buses between the cross free and they'll have security on them," Premier O'Farrell said.

"Last year an extra 250 availability peak taxi licenses were made available and we'll continue to fine tune and adjust."

The AHA also believes the new laws will put new pressures on already struggling businesses.

"Lockouts and closures in the Sydney city centre will also have an undeniable impact on the night-time economy, penalising businesses that are well run and have had nothing to do with the recent violence."

NSW Premier Barry O'Farrell yesterday announced 1.30am lockouts would be introduced at licensed premises across an expanded Sydney CBD precinct and there would be an end to drinks at 3am.

"This is about trying to send a very clear message to the industry that yes, you can continue to trade after 3 o'clock, but drinks will cease at 3 o'clock."

The premier also signalled the closure of bottle shops after 10pm.

"Licensed venues alone are not the source of all the alcohol problems across NSW, bottle shops have to play their role as well," he said.

Small bars will be exempt from the lockout, along with Star Casino and the area of Barangaroo, where James Packer's six-star hotel and casino will be built.

"This is not about penalising responsible drinkers," he said. "It is about attacking the irresponsible acts of those who allow themselves to be intoxicated, whether by drugs or alcohol."

He said the new restrictions would apply to venues within the area stretching from Kings Cross to Cockle Bay, The Rocks to Haymarket and Darlinghurst.

As news of the crackdown spread, residents of NSW took to social media to express outrage at "draconian" new laws relating to alcohol consumption - including lockouts and bottle shop closures.

Kings Cross nightclub owner John Ibrahim tweeted: "The announcement today will not change the youth drinking culture. Punishing the majority for the actions of a few morons!"

Come on Sydney, this is a bit draconian! http://t.co/FhnRhw2owI — Adam Roan Henderson (@adamrh) January 21, 2014

The 1.30am lockout is a joke. The only thing it will do is dent Sydney's nighttime economy. — Alex Cauchi (@alexcauchi) January 21, 2014

What do you think of the booze crackdown? Tell us in the comments below.

Other measures under the premier's plan:

- Maximum penalties for serious assaults, involving drugs and alcohol will increase by two years and mandatory minimums will also apply.

- Increase in maximum penalty for possession and illegal use of steroids, from two to 25 years, in line with Victoria.

- On-the-spot fines issued by police to deal with disorderly behaviour in entertainment hotpots to be raised from $200 to $1100.

- A multimillion-dollar community awareness program aimed at curbing binge drinking and alcohol-fuelled violence.

- Free buses to run every 10 minutes from Kings Cross to make it easier for people to get home after a night out.

- Periodic risk-based licences will be imposed for licensed venues across NSW and there will be a freeze on liquor licences for new pubs and clubs in the expanded Sydney CBD precinct.

- Eight year mandatory minimum sentence for one-punch offences under the influence of drugs or alcohol.

Daniel Christie was assaulted at 9pm, Thomas Kelly at 10pm. I'm having issues figuring out how a 1am lockout in Sydney will stop this. — Shaun Ewing (@swewing) January 21, 2014

Earlier this month, Mental Health Minister Kevin Humphries told the NSW Alcohol Summit at Parliament House he didn't support expanding the lockout program already in place in areas including Newcastle and the Hunter.

"Lockouts don't necessarily work for everybody," Humphries said during a panel discussion at the forum in early January, adding it was expected Sydney would have a 24-hour entertainment hub like Kings Cross.

"Everybody expects a city like Sydney, a world city, to have that kind of precinct," he said.

"It's not going to be a blanket approach."

Opposition Leader John Robertson also told the forum NSW was in the grip of a binge-drinking culture, but closing doors at every licensed premises after a certain hour wasn't the solution.

"You can't just say we're going to be a global city ... but some things aren't going to be available," he said.

I guess weekend trips to Sydney are off the cards! 1.30am lockout? And no bottle shops open after 10pm! #Sydney — Steph Rogers (@Stephrogers89) January 21, 2014

The Labor leader said the key was changing drinking culture.

"I think we've got to start looking and dealing with alcohol in the same we were dealing with tobacco when we started in the late 70s and early 80s," he said.

RELATED: A NEW GENERATION OF GUTLESS THUGS

In addition to the new booze laws, Premier O'Farrell says his government will introduce an eight-year mandatory minimum sentence for one-punch offences committed under the influence of drugs or alcohol.

"We are sending a clear message about alcohol and drug-induced violence," the premier told reporters in Sydney on Tuesday.

He said parliament would be recalled early to pass the suite of new measures including a one-punch law that would have a 20-year maximum, rising to a 25-year-maximum where drugs and alcohol are involved.

The Australian Hotel Association supports the tougher sentencing for alcohol-fuelled "thugs".

"The organisation wholeheartedly welcomes tougher sentencing for thugs and official recognition of the role drugs play in night-time violence," the AHA said in a statement.

Mr O'Farrell has come under intense pressure in recent weeks to act against alcohol-fuelled violence after the deaths of 18-year-olds Thomas Kelly and Daniel Christie, who were victims of one-punch attacks at Kings Cross.

The family of Thomas Kelly said they hoped the government's proposed laws would shield other families from the heartache they had suffered.

"It won't change anything for Thomas's case," the slain 18-year-old's father, Ralph Kelly, told reporters.

"We're standing here for the people who will follow us." Mr Kelly said the proposed reforms meant his son's death wouldn't be in vain.

"The sentencing reform has gone way above what we were asking for," he said.

Police, doctors and paramedics were quick to welcome lockouts at pubs and clubs from the Rocks to Kings Cross and along George Street to Haymarket, as well as a statewide 10pm closing time for bottle shops.

"This is a big win for community safety," Gerard Hayes of the Last Drinks alliance told reporters.