Sydney nightclub owner and entrepreneur Justin Hemmes, who promotes the annual music event held in Centennial Park, said that he has decided that it should be "rested" for 2012.
Hemmes told The Daily Telegraph: "We will not be going ahead with the festival this year. We will be in touch in due course regarding plans for 2013."
He said that he may reschedule the festival for later in the year, but was forced to cancel it because of "competitive demand for artists resulting in higher artist fees, unpredictable weather and a shifting live music market''.
Earlier this year, New Zealand's Big Day Out music festival was cancelled due to "soil, economic and cultural changes", with the event director saying: "The market has been very difficult."
Hip-hop star Kanye West was also dropped from the Perth and Adelaide legs of the Big Day Out music event after organisers decided to make financial cuts.
Past performers at Good Vibrations include James Brown, The Killers, Snoop Dogg, Beastie Boys, Fatboy Slim, Basement Jaxx, Scissor Sisters, Calvin Harris, Gossip and The Ting Tings.
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