NSW Government Backflips on Cafe Mug Rules, $110,000 Fine Law to Be Scrapped

The New South Wales government has backflipped on its plan to force cafes to offer customers who dine in the option of mugs and glasses instead of takeaway cups. The Chris Minns government will also ditch a law that would have required businesses to participate in a reusable cup scheme or risk a fine up to $110,000.

Labor reversed its position a week after the legislation passed parliament, following a backlash from small businesses and News Corp Australia.

The reform was part of the Minns government's plan to reduce plastic waste given Sydney's landfill is projected to run out by 2030.

The laws to be axed would have made it a requirement for cafes to offer mugs or glasses when customers dined in from 2028.

The NSW environment minister, Penny Sharpe, told 2GB radio on Wednesday morning that the government would repeal the laws relating to mugs and glasses and the potential $110,000 fine. She said: '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.'

Sharpe added: 'It was always the plan that there would be extensive exemptions.'

Separate reforms requiring businesses to accept customers' own reusable cups — so long as they are 'clean' — will remain in place. So too will a law requiring single-use takeaway cups to be recyclable by 2028.

The Daily Telegraph ran a front page last week with the headline ''Nup' to the Cup'. There were multiple stories with small business owners criticising the cost of participating in the reusable cup scheme.

The premier, Chris Minns, had defended the legislation in an interview on 2GB on Tuesday, stating the government was 'not getting rid of disposable cups anywhere in any place'. He said: 'I use disposable cups, most people use disposable cups. I don't know whether we've done a good enough job of explaining the policy.'

On Wednesday, Sharpe said she had spoken with Minns. She said: 'We said: Look, do we need to mandate this? No, we don't, and that's why it's really important that we need to clear this up.' Sharpe has asked the NSW Environment Protection Authority (EPA) to issue a 'statement of regulatory intent' to make clear the government was not progressing with certain changes.

The legislation won't be repealed until after the March 2027 election. Only two sitting weeks remain before parliament is dissolved.

On Tuesday, the NSW opposition had said if elected next year it would repeal the laws which it claimed 'add another layer of regulation that is suffocating NSW businesses'. Labor is under pressure from the Coalition and One Nation. Both are running pro-small business platforms and pledging significant cuts to payroll tax.