It comes on the back of NSW Health cancelling Lunar Electric music festival with less than two days notice. The festival, which was set to go ahead in Newcastle on Saturday, was cancelled late Thursday afternoon with stages and facilities already set up.

Shadow Arts Minister Walt Secord said the government announced in November that it had been working on an insurance model to cover COVID-related losses of large events "for several weeks."

"The Government needs to implement a business interruption plan as they promised they would months ago when Bluesfest was suddenly shut down over Easter," Mr Secord said.

"It is well past time for the NSW government to step up and take responsibility to protect this vital industry and so many local jobs."

Labor cited figures from a national survey by I Lost My Gig Australia which claimed that at least 32,000 gigs have been cancelled since July 1st this year, equating to at least $94 million of lost income.

"Why should hard-working performers, promoters, organisers, and festivals shoulder all the risk during the pandemic," Mr Secord said.

Organisers of Lunar Electric music festival said they were "devastated" by the cancellation and would "not be rescheduling the Newcastle festival".

"We are currently working through the refund process and all ticket holders will be notified as soon as possible," festival directors Simon Leigh and Shaun Dun said in a joint statement following the event's cancellation on Thursday.

IN THE NEWS:

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: