Singer James Stephenson said the council should use its discretion instead of having a blanket rule for all street performers.
The Queenstown Lakes District Council is proposing changes after a review of its Trading and Obstructions in Public Places Bylaw.
The draft bylaw, released last week, includes requiring buskers to move every hour and take 30-minute breaks between performances.
It also gives authority to adjacent businesses and residents to "justifiably" request buskers to move.
Mr Stephenson said some of the changes were "over the top".
Buskers should be asked to move on if they were "really bad", rude to passersby or blocking foot traffic, he said.
Professional musicians should not be punished because of a minority of buskers who caused problems.
He said it was unfair to require buskers who were trying to make a living to take 30 minutes' break between hourly performances.
If the proposed changes were too restrictive, it might prohibit performers from coming to the town.
Street performers should be encouraged because they added to the "community feel" of a town, especially in summer, he said.
He found the council "really good" to deal with and received his free permit by email before arriving in New Zealand.
"I did about two hours straight playing the keyboard and singing in the mall on Sunday and no-one asked me to move along.
I made quite a lot of money," he said.
He said the current rules were "quite refreshing" compared with Sydney, where buskers had to pay for permits and move every 45 minutes.
Mr Stephenson lived in Queenstown for six months two years ago and now performs here on annual holidays.
Lakes Environmental chief executive Hamish Dobbie said the changes were "wider ranging" but clarified permit requirements.
"This review is aimed at tidying up inconsistencies in the previous bylaw. It's standardising conditions [of permits]," he said.
The permits would still be free, he said.
The proposed changes are open to submissions from January 9 to February 15.
