Yackandandah Folk Festival director Chris Smith said the cancellation of the town's biggest event was devastating and was especially painful given the depressed tourism over summer due to the smoke and bushfires.

"Tourism got very quiet, the smoke was nuisance but tourism went right down," he said. "There would never be a good time, but with everything else that's gone on...

"Our whole community relies on this festival, it's our main fundraiser for the community.

"A lot of shops make money through it that help tide them over in the quieter times."

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Mr Smith said it was grating to hear that the Prime Minister planned to go to the NRL despite the government announcing events of more than 500 people should be cancelled from Monday.

He said while he agreed with the decision to stop mass gatherings, it resulted in a lot of pain for event organisers, communities, businesses, musicians and sound engineers relying on festivals.

"So many people will be hurt," he said.

"It was disappointing for the government to announce that [from Monday] you can't have events, but the Prime Minister was saying he'd go to the footy.

"It was hypocritical.

"He later cancelled but you can't do it, you can't have an announcement that will affect millions of people but say 'I'm going to the footy'."

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Mr Smith said t-shirts and programs had already been printed and over a year's planning had gone into the festival - but it was not feasible to postpone the festival.

"We had nearly 50 overseas acts booked, and when would we postpone to?," he said. "While it's hard for us we feel so sorry because it impacts so many other people, the community, businesses, performers."

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