Modern Slavery Act Reform for Australia

This article was contributed by Sustainability Tracker.

What’s Actually Changing for Businesses

Since the Modern Slavery Act 2018 came into force, Australian businesses with $100 million or more in annual consolidated revenue have had to publish an annual statement describing the risks of modern slavery in their operations and supply chains. There has never been a penalty for getting that statement wrong, or for failing to back it up with real action. That’s the part of the Act the government is now moving to change, and the window to have a say on how closes in a matter of days.

From disclosure to enforcement on Australia’s Modern Slavery Act

The Act has functioned since 2019 as a public disclosure regime. There’s no civil or criminal penalty currently attached to a poor-quality statement or a lack of real due diligence behind it. A 2023 independent statutory review, led by Professor John McMillan AO, found no hard evidence that the Act had yet caused meaningful change for people living in conditions of modern slavery, and made 30 recommendations for reform. The government’s response, released in December 2024, accepted, in full, in part, or in principle, 25 of those 30 recommendations.

That set the direction. On 16 July 2026, Attorney-General Michelle Rowland announced the government’s intention to legislate a genuine enforcement mechanism: a new criminal offence, civil penalties, and stronger powers for the Australian Anti-Slavery Commissioner.

The failure to prevent offence, explained

The most significant single change is a new criminal offence for companies with annual consolidated revenue over $100 million that fail to prevent modern slavery in their supply chains. A “reasonable steps” defence would be available where a company can show it had adequate procedures in place. The government also intends to introduce civil penalties and related enforcement powers to address non-compliance with the existing reporting obligations under the Act, a separate mechanism from the new criminal offence.

Two other proposed changes are worth knowing about. First, the Anti-Slavery Commissioner would gain the power to formally declare that a particular product, service or industry carries a high risk of modern slavery, with reporting entities required to have regard to those declarations in their own due diligence and reporting. This mirrors a recommendation Commissioner Chris Evans made in his own position paper in January 2026. Second, joint reporting requirements would change so that a parent entity becomes responsible for submitting a statement on behalf of its whole corporate group where the group’s combined revenue meets the threshold.

Why this Modern Slavery Act reform is happening now

Domestic pressure had been building for years. Walk Free’s Global Slavery Index estimates more than 41,000 people are living in modern slavery in Australia, and Professor Justine Nolan of UNSW’s Australian Human Rights Institute has welcomed the reforms as an important step toward addressing exploitation that persists in Australian supply chains. Australia’s inaugural Anti-Slavery Commissioner, Chris Evans, took office in December 2024.

There was also a specific, dated trigger from overseas. On 12 March 2026, the US Trade Representative opened investigations under Section 301 of the Trade Act of 1974 into 60 economies, including Australia, over their failure to impose or effectively enforce prohibitions on imports made with forced labour, comparable to the US’s own long-standing ban under Section 307 of the Tariff Act of 1930. In early June 2026, the USTR found that all 60 economies examined, Australia included, had failed to adequately enforce such a ban, and proposed an additional tariff of 12.5% on most of them, including Australia. Roughly six weeks later, the Australian government announced its intention to strengthen the Modern Slavery Act. Walk Free has reported that strengthening the Act with real criminal liability could see the proposed tariff on Australian exports reduced from 12.5% to 10%.

The $100 million threshold isn’t moving yet, but it isn’t settled either

The 2023 review recommended lowering the reporting threshold from $100 million to $50 million, which would pull in an estimated 2,393 additional entities. The government’s December 2024 response didn’t adopt this. It “noted” the recommendation rather than agreeing to it, saying it wasn’t appropriate to lower the threshold before assessing how the other reforms would affect reporting requirements. The current round of reforms, based on the government’s July and August announcements, centres on the new offence, the civil penalties, and the Commissioner’s powers, not on the threshold. For now, the $100 million line stands, and roughly 3,000 entities are directly required to report.

Why businesses under $100 million have reason to pay attention anyway

The direct reporting obligation only applies above the threshold, but the proposed reforms reach further than the entities that have to file a statement. If the Anti-Slavery Commissioner declares a product, service or industry high-risk, every reporting entity that touches it has to factor that into its own due diligence. In practice, that pressure moves down the supply chain to smaller suppliers who sell into a $100 million-plus business, well before those suppliers ever approach the threshold themselves. A supplier that can show clear labour practices and traceability is easier for a reporting entity to keep working with once its own due diligence obligations carry real legal consequences.

Key Dates to Know

The Attorney-General’s Department released its consultation paper, Strengthening Australia’s legislative response to modern slavery in supply chains, on 21 August 2026. 

Submissions close at midnight AEST on Friday 25 September 2026.

If the government proceeds to draft legislation after that, a bill would need to pass through Federal Parliament, and the consultation paper itself proposes a deferred commencement period of 12 to 18 months between the law passing and it becoming operational for businesses. 

What businesses need to know, and what to do about it now

Nothing described above is law yet. The offence, the penalties, and the Commissioner’s expanded powers are all still at the consultation stage, and the timeline shows real distance between now and any of it becoming operational. That said, the direction is clear enough to plan around, and there are concrete, low-cost things a business can do today regardless of how the consultation lands.

If your business already reports under the Act (revenue over $100 million):

• Re-read your last statement like a regulator would, not like a filing task. Generic language against the seven mandatory criteria is a bigger liability under the proposed civil penalties than it is today.
• Start an evidence file now: supplier audits, worker interviews, contract clauses, remediation records. A “reasonable steps” defence needs proof of action, not a policy document.
• Flag which products, services or sourcing regions could plausibly become a future Commissioner high-risk declaration. Check they’re already covered in your due diligence.
• If you’re part of a corporate group, check who owns compliance under the proposed single group-level statement from the parent entity.

If you’re a supplier to a $100 million-plus business, even if you don’t report yourself:

• Expect sharper due diligence questions from customers who do report. Their legal exposure now rests partly on what you tell them.
• Keep labour practices documented and ready to hand over: contracts, subcontractor lists, worker conditions. Don’t start from scratch when asked.
• Working in a higher-risk sector (agriculture, textiles, construction, cleaning, electronics manufacturing)? Get ahead of a future high-risk declaration rather than wait for one.

If you’re not sure where you sit: 

• Check your (or your group’s) annual consolidated revenue against the $100 million threshold. Between $50 million and $100 million? The 2023 recommendation to lower the threshold was deferred, not ruled out.
• Affected by any of this? The consultation is open until 25 September 2026 (Attorney-General’s Department media release). A submission is a direct way to have input before it becomes law.

None of the above is legal advice, and a proposed criminal offence is exactly the kind of thing worth checking with a lawyer once the legislation is actually drafted. The steps here are about being in a defensible position regardless of where the consultation lands, not about pre-empting a specific legal outcome. 

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Frequently Asked Questions

Do I have to report on modern slavery for my business in Australia?

Only if your business, or your corporate group, has annual consolidated revenue of $100 million or more. That threshold currently covers around 3,000 entities. A 2023 review recommended lowering it to $50 million, but the government hasn’t adopted that change, so it still sits at $100 million for now.

What happens if I don’t do a modern slavery statement, or do a bad one?

Right now, nothing formally, since the Act has never had a penalty for non-compliance. That’s exactly what’s changing. The government is proposing civil penalties for non-compliance with the existing reporting obligations, and a separate new criminal offence for larger companies that fail to prevent modern slavery in their supply chains altogether.

Is my small business at risk even though I don’t report myself?

Possibly, indirectly. If you supply into a business that does report, that business’s own legal risk now depends partly on what it knows about you. If the Anti-Slavery Commissioner later declares your product, service or industry high-risk, your customer will be expected to factor that into their due diligence, which usually means more questions and requirements coming your way.

When do the new modern slavery penalties actually start?

The government’s consultation on the proposed changes closes 25 September 2026. If it proceeds to legislation, a bill still has to pass Federal Parliament, and the government has flagged a further 12 to 18 months after that before any new obligations would actually apply to businesses.

What’s the “failure to prevent” offence in the new modern slavery laws?

It’s a proposed new criminal offence for companies with revenue over $100 million that fail to prevent modern slavery happening in their supply chains. A company could defend itself by showing it took reasonable, demonstrable steps to prevent it, similar in concept to “failure to prevent” offences used in other countries’ bribery and corruption laws.