NSW Labor scraps dine-in mug mandate after business pushback

The New South Wales government will repeal legislation requiring cafes to offer mugs and glasses to diners, ending a mandate that carried potential fines of up to $110,000. Environment Minister Penny Sharpe announced the reversal on 2GB radio on Wednesday, stating the move would relieve pressure on small businesses. The legislation had passed parliament only one week prior.

The rules were part of a wider state plan to reduce plastic waste, a measure prompted by projections that Sydney’s landfill will reach capacity by 2030. Under the original draft, cafes were required to offer reusable options to customers dining in starting in 2028. The government also planned to require businesses to participate in a reusable cup scheme, with penalties for non-compliance.

Sharpe explained the decision by citing the operational needs of local enterprises. “We know small businesses are under pressure and we want them to be able to operate in the way that they need to operate, to run their business,” she said. She noted that extensive exemptions were always part of the initial design, but the government chose to remove the mandatory elements entirely to clarify its position.

Premier Chris Minns defended the original policy in a Tuesday interview, asserting that the government was not eliminating disposable cups. “I use disposable cups, most people use disposable cups,” Minns said. He suggested the administration had not communicated the policy clearly enough. On Wednesday, Sharpe confirmed she had spoken with Minns to determine whether a mandate was necessary. They concluded it was not.

Some reforms will remain in effect. Businesses must continue to accept customers’ own reusable cups, provided they are clean. Single-use takeaway cups must also be recyclable by 2028. Sharpe has asked the NSW Environment Protection Authority to issue a statement of regulatory intent to formally signal that the government is not proceeding with the specific mug and glass requirements.

The legislative repeal will not take effect until after the March 2027 election, as only two sitting weeks remain before parliament is dissolved. The opposition stated it would repeal the laws if elected, arguing they added unnecessary regulatory layers. Meanwhile, the NSW Greens criticized the reversal as a capitulation to media influence over environmental policy.

Jeff Angel, director of the Boomerang Alliance, described the backdown as a retreat from a key method of reducing plastic waste. He noted the timing coincided with the federal government shelving its own packaging standards. Labor faces increasing pressure from the Coalition and One Nation, both of which are campaigning on pro-small business platforms and proposing payroll tax cuts.