NSW scraps mandatory dine-in mug law after small business outcry

The New South Wales government will remove legislation requiring cafes to offer mugs and glasses to customers dining in. Environment Minister Penny Sharpe confirmed on Wednesday that the state would also drop the provision allowing fines of up to $110,000 for businesses participating in a reusable cup scheme. The reversal comes one week after the bill passed parliament.

Sharpe told 2GB radio that the change reflects an acknowledgment of the pressures facing small business owners. “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. The government had previously stated that reusable cup schemes would not be mandatory for small businesses and that trials would occur at government-owned venues like stadiums and office buildings.

The policy shift follows intense criticism from News Corp Australia and small business groups. The Daily Telegraph ran a front-page headline last week opposing the rule, while multiple reports featured cafe owners detailing the costs of participating in the reusable cup scheme. Premier Chris Minns defended the original legislation on Tuesday, noting that he personally uses disposable cups. “I use disposable cups, most people use disposable cups,” he said. “I don’t know whether we’ve done a good enough job of explaining the policy.”

Sharpe indicated that she spoke with Minns before finalizing the decision. “We said: ‘Look, do we need to mandate this?’ Sharpe said. “No, we don’t, and that’s why it’s really important that we need to clear this up.” The government will ask the NSW Environment Protection Authority to issue a statement of regulatory intent to clarify that specific changes are no longer proceeding.

Several related laws will remain in effect. Businesses must continue to accept clean reusable cups brought by customers. A separate requirement mandates that single-use takeaway cups be recyclable by 2028. The initial proposal was part of a wider plan to reduce plastic waste, driven by projections that Sydney’s landfill capacity would run out by 2030.

The legislation will not be formally repealed until after the March 2027 election. Only two sitting weeks remain before parliament is dissolved. Opposition parties, including the Coalition and One Nation, have pledged to cut regulation and payroll tax if they win power. One Nation has proposed halving the tax employers pay on wages in regional areas.

Greens spokesperson Sue Higginson criticized the decision as a “coffee cup captain’s call.” She argued that the media had more influence on the outcome than the environment minister. Boomerang Alliance director Jeff Angel said the state was backing down on a key method for reducing plastic in the environment. Minns, Sharpe, and News Corp Australia were contacted for comment.