NSW scraps cafe mug rules after small business complaints

The New South Wales government has abandoned a plan to require cafes to offer mugs and glasses to customers dining in. The Labor government reversed its position less than one week after the legislation passed parliament. The change follows a wave of criticism from small business owners and News Corp Australia.

Environment Minister Penny Sharpe announced the decision on Wednesday morning via 2GB radio. She confirmed the government would repeal the rules that would have mandated the use of mugs or glasses starting in 2028. The government will also remove a penalty that allowed fines of up to $110,000 for businesses that failed to join a reusable cup scheme. Sharpe stated that the government wants businesses to operate in the manner necessary to run their operations. She noted that extensive exemptions were always part of the original plan.

Premier Chris Minns had previously defended the policy in a Tuesday interview. He told the radio station that the government was not eliminating disposable cups. Minns, who said he uses disposable cups himself, questioned whether the policy had been explained clearly enough to the public. However, Sharpe said she spoke with Minns on Wednesday and asked if the mandate was necessary. The two concluded it was not, and decided to clarify the regulatory stance.

Several other environmental reforms will remain in effect. Businesses will still be required to accept customers' own reusable cups if they are clean. Single-use takeaway cups must be recyclable by 2028. These changes are part of a wider strategy to reduce plastic waste, as Sydney's landfill is projected to run out of space by 2030. The government will ask the NSW Environment Protection Authority to issue a statement of regulatory intent to confirm the specific changes being dropped.

The legislative process for removing the laws is complicated by the upcoming election. Parliament will not fully repeal the legislation until after the state election in March 2027. Only two sitting weeks remain before parliament is dissolved. The opposition had already pledged to repeal the laws if elected, arguing they add a layer of regulation that suffocates local businesses.

Reaction to the reversal has been mixed. Sue Higginson, the Greens environment spokesperson, criticized the decision as a capitulation to media pressure. She called it a sad day for the government and expressed alarm that Labor had backed down on another environmental commitment. Jeff Angel, director of the Boomerang Alliance, said the backdown followed the federal government's shelving of packaging standards. He argued that the move shows Labor has an aversion to making real changes regarding plastic waste.

The political landscape in New South Wales is shifting. The Labor government is under pressure from the Coalition and One Nation, both of which are promoting platforms focused on small business support. One Nation has pledged to cut payroll tax by half and eliminate it in regional areas. Last week, Minns also reversed a decision on rail timetable changes after commuter complaints. A recent survey indicated that Labor and One Nation were tied on 28% of the primary vote, with the Coalition at 23%. Minns stated that polls suggest One Nation leader Mike Newman would become premier or opposition leader after the March vote.