NSW Reversal: Labor scraps cafe mug mandate after backlash

$110,000. That is the maximum fine the New South Wales government will no longer impose on businesses that fail to join a reusable cup scheme. Environment minister Penny Sharpe announced the repeal of that penalty on Wednesday morning, reversing a key component of the state’s plastic waste reduction strategy just one week after it passed parliament.

The Labor government is also dropping the requirement for cafes to offer mugs and glasses to customers dining in, a rule scheduled to take effect in 2028. Sharpe told 2GB radio that the government heard small businesses were under financial pressure and needed the flexibility to operate as they see fit. "It was always the plan that there would be extensive exemptions," Sharpe said.

The policy shift follows intense criticism from local business owners and News Corp Australia. The Daily Telegraph ran a front-page headline last week reading "'Nup' to the Cup," highlighting concerns over the cost of participation. While the mandate for dine-in mugs is gone, separate reforms requiring businesses to accept customers' own clean reusable cups will stay. Additionally, the law requiring single-use takeaway cups to be recyclable by 2028 remains in effect.

Premier Chris Minns initially defended the legislation in a Tuesday interview, noting that he personally uses disposable cups. "I don't know whether we've done a good enough job of explaining the policy," Minns stated. By Wednesday, however, Sharpe said she and Minns agreed that mandating the change was unnecessary. "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 NSW Environment Protection Authority will issue a statement of regulatory intent to clarify the government's new position. The formal repeal of the laws will occur after the March 2027 election, as only two sitting weeks remain before parliament dissolves. The opposition had already pledged to repeal the measures if elected, arguing the regulations were suffocating local commerce.

Greens environment spokesperson Sue Higginson criticized the move as a "coffee cup captain's call." She argued that the Daily Telegraph had more influence on the decision than the environment minister. Jeff Angel, director of the Boomerang Alliance, said the reversal follows the federal government's shelving of packaging standards. "It seems Labor has an aversion to actually making real change," Angel said.

The political pressure on the Minns government is rising ahead of the March vote. A recent poll showed Labor and One Nation neck and neck on 28% of the primary vote, with the Coalition at 23%. One Nation has pledged to cut payroll tax by half, a move Minns has urged the party to cost through the state budget office. Newman has refused to commit to that process.