Tasmania's COVID-19 physical distancing rules should be eased to prevent more venues from closing and further job losses, the peak hospitality body says.
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However, Public Health Services remain adamant the restrictions are needed to keep Tasmanians safe.
Tasmanian Hospitality Association chief executive Steve Old says the one person per two square metre rule is too restrictive.
"We need to lock down borders as the government has announced but with the virus apparently not being in Tasmania, we need to let restrictions go," Mr Old said.
"We need to allow Tasmanians to get out and about and support local business and jobs.
"Everyone I talk to says the same. There is no reason why we have restrictions if the virus is not here."
Mr Old said the THA was very happy with Premier Peter Gutwein's stand on re-opening borders to South Australia, Western Australia and the Northern Territory from August 7 but wanted the physical distancing rules relaxed.
"The one person per two square metres is restrictive," he said.
"The venues that are open are only half full but they still have to pay 100 per cent of their bills - they can only stay closed for so long under these rules and I expect more venues will close for ever.
"You can't dance, you can't play eight ball and the young ones are like caged lions
"Our members are very angry and frustrated that we still have strict distancing rules.
"Hospitality staff cop abuse from the public when they are forced to sit down with their drinks or not allowed in to a half full restaurant which is very hard and frustrating for them."
A Public Health spokesman said: "While we understand that distancing and capacity rules pose challenges to both businesses and their patrons, these measures are extremely important in limiting the spread of coronavirus should it occur in our community."
Mr Old said many hospitality businesses remained shut and he feared some would never re-open.
There have been no fines for hotels or restaurants breaching the rules but some have been issued with WorkSafe notices for improvement in relation to signage, he said.
"We've been continually pushing the government to ease restrictions but all we get is that 'we're taking health advice' - well they need to get some economic advice too," Mr Old said.
"We're getting heaps of inquiries about weddings because you have to sit down at those too and there's no dancing allowed.
"A lot of landlords have gone back to full rent from July 1 and most venues would be operating at half capacity. If the message is it is safe to go out out why not lift restrictions?"
The THA also wants a government media campaign to explain distancing and capacity rules.
Labor leader Rebecca White agreed there was confusion about why people were not allowed to stand at a bar and drink or play eight ball which put staff in difficult positions when they needed to enforce rules.
"Most Tasmanians are doing the right thing but it's important the government supports venues and workers with the information they need and that they continue to promote what the rules are so all Tasmanians understand them," Ms White said.
"With borders set to reopen in August, it is vital the government helps venues and workers with any adjustments so that they can be safe at work and customers feel safe too.
"Mandatory testing for all essential workers arriving in Tasmania and current social distancing regulations remain our best defence against the spread of the virus."
A new case of coronavirus was confirmed in Tasmania last week after the State had gone 65 days without any cases.
Public Health Service deputy head Scott McKeown said the new case was a young woman who had been in hotel quarantine after returning to Tasmania from Victoria.
She is being treated in the Royal Hobart Hospital.