Key takeaways 

• Product safety penalties could increase substantially, including penalties of up to $1 million for failures involving recall notifications and mandatory incident reports.
   
• The Australian Competition and Consumer Commission (ACCC) could receive new targeted intervention powers, allowing it to require safety communications, supply-chain cooperation, product testing, risk assessments and interim risk-control measures.
   
• Mandatory reporting obligations may be expanded to capture a broader range of injuries and illnesses, as well as near misses where a product hazard could reasonably have caused serious harm.
   
• The voluntary recall framework could be clarified and strengthened, including clearer recall triggers, improved terminology, greater information sharing and confirmation that notifying the ACCC is not itself an admission of liability.
   
• Businesses should review their product safety systems now, particularly their reporting processes, recall procedures and internal escalation protocols, to prepare for a potentially more demanding post-market regulatory environment.

The Australian Government has released a Consultation Regulation Impact Statement (CRIS) that could reshape how product safety is regulated under the Australian Consumer Law (ACL). The CRIS is part of a $6.6 million, three-year reform program committed to by the Government in the 2026–27 Budget, and it is the first stage of what is set to be a broader modernisation of Australia's product safety system. In this article, we unpack the key proposed reforms and the possible implications for businesses.

Possible reforms 

Importantly, the CRIS puts forward nine reform options and focuses exclusively on post-market measures — that is, the regulatory tools used to identify, manage and respond to product safety risks after products have already been supplied to consumers. Pre-market measures (such as a general prohibition on the sale of unsafe products, which many other OECD countries have) are not covered in the CRIS but have been flagged as future priorities

1. Significantly increased penalties 

with product safety obligations. While maximum penalties for the most serious ACL contraventions have already risen from $10 million to $50 million in 2022, and again to $100 million in 2026, a number of important 'supporting' obligations — including mandatory reporting and recall notifications — still attract comparatively low penalties. 

The CRIS proposes to change that. Key proposals include:

• Recall notifications and mandatory reporting: the maximum penalty for bodies corporate for failing to comply with their obligations to notify the Minister of a voluntary recall or submit a mandatory report following a death or serious injury would increase from $16,500 to $1 million;
   
• Mandatory standard compliance: the maximum penalty for bodies corporate for failing to notify the ACCC of its method of compliance with a safety standard would increase from $50,000 to $3 million;
   
• Compliance method nominations: the maximum penalty for bodies corporate for failing to comply with a nominated method under a safety standard would increase from $250,000 to $5 million. 

2. New targeted intervention powers for regulators 

Currently, where a supplier does not voluntarily address a safety issue, the primary regulatory option is for the ACCC to recommend that the responsible Minister issue a compulsory recall — a process that can be lengthy and resource-intensive. The CRIS proposes to fill the ‘gap’ between voluntary action and compulsory recalls by giving regulators new targeted intervention powers. Under the proposal, the ACCC could direct a supplier to take specified actions where it reasonably considers that a product supplied to consumers will or may cause injury and the supplier's response is absent, delayed or inadequate. These powers would include:

• requiring a supplier to conduct targeted safety communications to consumers and supply-chain participants to inform them of safety risks; 
   
• requiring supply-chain cooperation between manufacturers, importers, distributors, retailers and online marketplaces, to assist with the implementation of a voluntary recall or investigation; and
   
• where no voluntary recall is underway, requiring product testing, risk assessments, and interim measures such as temporarily ceasing supply, quarantining stock or removing online listings. 

The CRIS emphasises that these powers would not empower a regulator to require a recall, permanently stop supply of a product, or require consumer remedies — these options would still require a compulsory recall or ban. The powers will likely also be subject to a number of safeguards, such as a supplier’s right to seek a review or reconsideration of a regulators’ intervention. 

3. Broader mandatory reporting obligations

The CRIS identifies potential shortcomings in the current mandatory reporting framework that presently requires suppliers to report to the ACCC within two days of becoming aware that a death or serious injury or illness was caused, or may have been caused, by a product they supply. The existing reporting obligations may not capture the full extent of product-related harm and safety concerns because only a limited range of incidents trigger the current supplier reporting obligations. To be reportable, an incident must meet a number of statutory criteria. As a result, some incidents that may nevertheless be relevant to product safety monitoring may fall outside the current reporting framework. 

In addition, ‘near misses’ are also not required to be reported under the current mandatory reporting framework. While ‘near misses’ may not result in death, injury or illness, they can provide regulators with useful information regarding product failures, hazards and patterns of risk.

The proposed reforms would significantly expand what must be reported:

• Broader incidents: the CRIS canvasses requiring reports for any injury or illness (not just 'serious' ones), or alternatively simplifying what constitutes a 'serious' injury — including by expanding the categories of treating health practitioners and removing certain limiting criteria’
   
• Near misses: a new requirement to report incidents where a product failure or hazard could reasonably have resulted in death, serious injury or illness, even if no harm actually occurred. The CRIS cites the example of a baby capsule handle breaking while an infant was being carried down stairs — fortunately without injury. 

In addition, the CRIS seeks feedback as to whether the current two-day window for reporting should be retained, shortened or extended (for example, to three or four days) if the scope of reportable incidents is broadened. 

4. Changes to voluntary recalls 

Voluntary recalls remain the primary mechanism for addressing product safety risks once goods have been supplied. The CRIS proposes four reforms to strengthen this framework:

• Clarifying what triggers a recall notification: the ACL requires suppliers to notify the Minister within two days of taking a ‘recall action’ but does not presently define what actions constitute a ‘recall action’. 
   
• Improving recall terminology: the term 'voluntary recall' may discourage proactive action by placing emphasis on how a recall is initiated rather than its purpose. Alternatives such as 'supplier-initiated recall' or 'supplier-initiated safety recall' are proposed. 
   
• Enabling information sharing: uncertainty about privacy obligations may hinder effective recall communications. The CRIS proposes clarifying when personal information may be shared among supply chain participants for recall purposes, with appropriate safeguards. 
   
• Removing liability barriers: clarifying that notifying the ACCC of a voluntary recall is not, of itself, an admission of legal liability — removing a potential disincentive for suppliers to act early.

5. Streamlined administration of product safety laws 

Finally, the CRIS proposes to improve the efficiency of day-to-day product safety administration by shifting certain functions from the responsible Minister to the ACCC. Key proposals include:

• Enabling the ACCC to publish safety warning notices directly, rather than requiring Ministerial action — supporting faster communication with consumers about emerging risks. 
   
• Clarifying in legislation that the ACCC is the statutory recipient of voluntary recall notifications and mandatory reports, rather than relying on administrative delegations. 

The Minister would retain powers over high-impact interventions, including mandatory safety standards, interim and permanent bans, and compulsory recalls. 

What comes next — and what it means for your business

Submissions on the CRIS close on 18 October 2026. Stakeholder feedback will inform a subsequent Decision RIS, which will assess the impacts of any reforms the Government decides to pursue. The Government has not committed to any specific option at this stage. 

For businesses that manufacture, import, distribute or retail consumer products in Australia, the message is clear: the post-market product safety landscape is poised for significant change. Even if the most far-reaching proposals are moderated, the direction of reform points toward more reporting, greater regulatory intervention powers, higher penalties and increased administrative efficiency.

Businesses should consider reviewing their current product safety compliance systems, including mandatory reporting processes, recall procedures and internal escalation protocols to assess their readiness for a potentially more demanding regulatory environment. For businesses that already maintain robust safety frameworks, these reforms may help level the competitive playing field. For those that do not, the cost of inaction is set to rise.