David Leyonhjelm believes Sydney's lockout laws were a response to a moral panic.

Crossbench senator David Leyonhjelm wants to reignite the debate about Sydney's lockout laws, describing them as an over-reaction to a "moral panic" about one punch deaths.

The Liberal Democrat senator says the controversial laws will be a key focus of his Senate inquiry into the "nanny state" – government rules and regulations that restrict personal choice.

Senator Leyonhjelm describes the lockout laws as an over-reaction to a moral panic about one punch deaths. 

He says the NSW government laws, which require licensed premises in King's Cross and the city centre to lock out patrons after 1.30am, punish the many for the sins of the few.

"There's no question it's a sort of collective punishment for the guilt of individuals," he told Fairfax Media.

The laws were introduced 18 months ago after a public outcry over one-punch deaths, including that of Thomas Kelly.

Senator Leyonhjelm believes it was a media-led campaign that ignored key facts and didn't consider all the consequences.

"It was a classic moral panic," he said.

But Ralph Kelly, father of Thomas, strongly rejects that claim.

"It's absolute rubbish, it really is. They have no idea what they're talking about," Mr Kelly told Fairfax Media. He says the lockout laws are making Sydney safer and saving the NSW vast amounts of money by cutting down on alcohol-fuelled violence.

Senator Leyonhjelm says while laws don't affect him personally he says his constituents have been complaining long and loud.

The inquiry will hear from people whose social lives have been disrupted as well as business owners who have suffered. Mr Kelly says he would also be happy to appear.

Senator Leyonhjelm is also concerned the laws are hurting Sydney's reputation as an international city and denting tourism.

His comments come amid concerns that the lockout laws have forced late-night revellers into nearby suburbs.

While violence has decreased dramatically in King's Cross, it's been on the rise in the inner west.

Newtown experienced an 18 per cent increase in violent alcohol-related crimes after the laws were introduced, according to NSW Bureau of Crime Statistics and Research numbers. Neighbouring suburbs Petersham and Glebe have also experienced a rise in violence.

Senator Leyonhjelm fears a new moral panic that will see the laws extended.

"Next their call will be for the lockouts to be extended to Newtown. So then they might move to Paddington or Bondi – so where does it end?"

"Essentially it'll get down to 'well you shouldn't be out at that time of the day'. And that's absolutely nanny state thinking: I don't approve of what you're doing therefore I'll make it impossible for you to do it."

Mr Kelly concedes areas like Newtown are seeing a big increase in late-night revellers. But he says that has not translated into a major increase in hospital admissions.

Whatever the inquiry recommends it will not be able to force the NSW government to change policy. But Senator Leyonhjelm hopes it will get the debate going again.

Brisbane Times 12th July 2015.