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The Australian Regulatory Hot-List for Buyers: What Every SMB Owner Needs to Know in 2026
Sylvia Luchian
CEO & Founder
Buying on autopilot is risky in any environment. In 2026, it’s particularly costly. The regulatory obligations sitting on Australian buyers have changed materially in the past eighteen months, and most of those changes carry consequences that small medium business (SMBs) owners are not always aware of.
This covers three areas where the regulatory environment has shifted in ways that directly affect procurement decisions: asbestos in imported products, the criminalisation of wage theft and its supply chain implications, and modern slavery obligations for businesses that sell to, or buy from, large companies above the reporting threshold. These are not hypothetical risks. They have produced enforcement actions, penalties, and product recalls in the past twelve months.
This briefing will be updated quarterly. The regulatory environment is moving. So should your supplier due diligence.
Australia has had a total ban on the manufacture, import, supply, sale, transport, use, and storage of all forms of asbestos since 31 December 2003.1 The ban isn’t new. The enforcement problem is.
The Australian Border Force has noted that goods that overseas labs or manufacturers have certified as asbestos-free may still contain low levels of asbestos that are not permitted in Australia.2 That sentence deserves to be read twice. A supplier's written certification that a product is asbestos-free is not sufficient protection for an Australian importer. The importer bears legal responsibility for what arrives at the border.
In 2025 and into 2026, asbestos contamination has been detected in fire-rated boards imported from China by a major Australian supplier and used in the construction of fire doors across Australia and New Zealand.3 In November 2025, the ACCC issued a recall notice over children's decorative coloured sand products that may contain asbestos.4 These are not obscure edge cases. They are products that ended up in commercial buildings and in children's hands.
We covered the children's sand recall in detail, including what it means for any business importing or retailing decorative or sensory products. You can read that here.
These are not obscure edge cases. They are a reminder that asbestos contamination does not announce itself. It shows up in product testing, in recalls, and in enforcement actions often long after the goods have been distributed.
If your business imports any product from a country where asbestos remains in commercial use, including China, Russia, Kazakhstan, and India, you carry a legal obligation to ensure those products do not contain asbestos.5 That obligation doesn’t transfer to the supplier. It sits with the importer.
The Australian Border Force can hold goods at the border pending testing, at the importer's expense. Goods that test positive are seized. Offences relating to the unlawful importation of asbestos can attract fines of up to $222,000 or three times the value of the goods, whichever is greater, and imprisonment of up to five years.6
The procurement implication is straightforward: any supplier providing products from higher-risk markets should be required to provide independent third-party laboratory testing results, not just a manufacturer's declaration. That testing should be sourced from a laboratory accredited under Australian standards, not from a laboratory in the country of manufacture.
BUYER ALERT: Products most commonly found to contain asbestos include: building materials (boards, tiles, gaskets), vehicle parts, friction materials, and some decorative products. Certifications from the country of origin are not adequate. Independent Australian-standard testing is the minimum required.
Key Takeaway: If you import products from markets where asbestos remains legal, your supplier's declaration is not enough. Independent testing is the only defensible position. Build it into your supplier contracts.
From 1 January 2025, intentional underpayment of wages is a criminal offence in Australia.7 The change was introduced through amendments to the Fair Work Act 2009 under the Closing Loopholes legislation.
For a company, the maximum penalty for wage theft is the greater of three times the underpayment amount or $8.25 million.8 For an individual, the maximum is ten years' imprisonment.9 These are not administrative penalties. They are criminal liability.
The offence applies to intentional underpayments of employee entitlements under the Fair Work Act or a relevant industrial instrument, including modern awards, enterprise agreements, and in some circumstances, superannuation.10
Importantly, the Fair Work Ombudsman has been explicit that honest mistakes are not captured by the criminal offence.11 Businesses that genuinely attempt to comply, make an error, and self-correct are not the target of these laws. The target is deliberate, systematic underpayment.
A Voluntary Small Business Wage Compliance Code gives businesses with fewer than 15 employees a way to avoid criminal charges for honest mistakes, provided they cooperate with the Fair Work Ombudsman and take corrective action.12
From 1 July 2026, employers must pay superannuation at the same time as salary and wages rather than quarterly. This is a significant change for payroll processes and cash flow management.13
The direct implication for the business's own employees is clear: payroll compliance is now a criminal matter, not just a regulatory one. The less obvious implication is for supply chain risk.
Businesses that supply to large organisations, particularly those subject to modern slavery reporting requirements, are increasingly being asked to demonstrate that their own labour practices comply with Australian law. A supplier with a history of wage underpayment, particularly in labour-intensive categories such as cleaning, hospitality, logistics, and construction, carries a reputational and legal risk that flows to the businesses that engage them.
When engaging suppliers in higher-risk labour categories, procurement due diligence should now include a basic review of labour compliance: Fair Work Ombudsman compliance history, current award and agreement coverage, and whether the supplier has been subject to any Ombudsman investigation or enforceable undertaking.
BUYER ALERT: From 1 July 2026, superannuation must be paid at the same time as wages. This is a cash flow and payroll systems change that requires advance planning. Check with your accountant before the deadline.
Key Takeaway: Wage theft is now a criminal offence. For your own business, payroll compliance is not optional. For your supply chain, labour practice due diligence is a growing expectation from larger customers, government buyers, and investors.
The Modern Slavery Act 2018 (Cth) requires large Australian businesses with annual consolidated revenue of $100 million or more to publish an annual modern slavery statement.14 The threshold captures approximately 3,000 entities. Most SMBs are below it.
Being below the threshold doesn’t mean the issue is irrelevant to your business. It means the obligation sits with the large businesses you supply to and they are passing it down.
Changes to the Modern Slavery Act in 2025 tightened the rules for large businesses above the threshold.15 There is now a stronger expectation, codified in legislation, that covered entities actively interrogate their supply chains, document risk, and disclose their findings credibly.16 General statements of commitment to human rights are no longer sufficient. Evidence of supplier engagement is now expected.
The government has confirmed support for civil penalties for failing to submit a statement, providing false information, or failing to comply with remedial action requests.17 An Anti-Slavery Commissioner has been appointed. The enforcement environment is tightening.
If your business supplies to a covered entity, which includes most large retailers, listed companies, government contractors, and multinationals, you will increasingly be asked to complete supplier questionnaires, sign supplier codes of conduct, or provide documentation about your own labour practices and supply chain.18
The businesses that are prepared for this scrutiny, that have documented their own supplier due diligence, their labour practices, and their purchasing controls, will be easier for large customers to retain and expand. The businesses that cannot demonstrate these things will be removed from supplier panels as covered entities tighten their modern slavery risk management.
Modern slavery risk in a supply chain sits primarily with the goods and services an organisation procures, the suppliers it engages, and the subcontracting arrangements within those supply chains.19 For SMBs, the most relevant risk categories include: imported goods from higher-risk countries, labour hire arrangements, cleaning and facilities services, and hospitality and food supply.
BUYER ALERT: If you supply to a business with annual revenue above $100 million, you are in scope for their modern slavery supply chain scrutiny. Being unable to respond to their questionnaire is a supplier panel risk. Prepare before you are asked.
Key Takeaway: Modern slavery obligations are a covered entity's legal problem. They become your commercial problem when covered entities start reviewing their supply chains. Get ahead of the questionnaire by mapping your own supply chain now.
Three different regulatory areas. One common failure point: procurement decisions made without adequate due diligence on suppliers and products.
The asbestos enforcement actions could have been avoided with independent product testing built into import specifications. The wage theft risks in supply chains are managed through labour practice due diligence at the point of supplier selection, not after the relationship is established. The modern slavery scrutiny is navigated by businesses that have already mapped and documented their supply chains, not by businesses that start from scratch when the questionnaire arrives.
Regulatory compliance is not a reason to stop buying. It is a reason to buy with more structure. Know your suppliers, know your products, and know what each commercial relationship requires of you and your supplier.
Stop buying on autopilot. The regulatory environment in 2026 doesn’t give you the luxury.
Asbestos and Silica Safety and Eradication Agency 2024, Preventing Prohibited Imports, Australian Government, Canberra, viewed 7 May 2026, https://www.asbestossafety.gov.au/import-and-export/import-and-export-regulations/preventing-prohibited-imports
Attorney-General's Department 2026, Modern Slavery Act, Australian Government, Canberra, viewed 7 May 2026, https://www.ag.gov.au/crime/modern-slavery/modern-slavery-act
Australian Border Force 2024, Customs Notice 2024/32: Assurances that imported goods do not contain asbestos, ABF, Canberra, viewed 7 May 2026, https://www.abf.gov.au/help-and-support-subsite/CustomsNotices/2024-32.pdf
Australian Taxation Office 2025, Super payment due dates, ATO, Canberra, viewed 7 May 2026, https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-to-pay-super/super-payment-due-dates
Catalyst Central 2025, Australia's 2025 IR Reforms, Catalyst Central, January, viewed 7 May 2026, https://www.catalystcentral.com.au/australias-2025-ir-reforms/
Fair Work Ombudsman 2024, New criminal underpayment laws start 1 January 2025, Fair Work Ombudsman, Canberra, viewed 7 May 2026, https://www.fairwork.gov.au/newsroom/news/new-criminal-underpayment-laws-start-1-january-2025
Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Cth).
International Trade Council 2025, Applying Australia's Modern Slavery Act Amendments (2025) to Downstream Manufacturers, International Trade Council, viewed 7 May 2026, https://tradecouncil.org/applying-australias-modern-slavery-act-amendments-2025-to-downstream-manufacturers/
Intertek 2025, Children's Sand Products Recalled in Australia Due to Asbestos, Intertek, November, viewed 7 May 2026, https://www.intertek.com/products-retail/insight-bulletins/2025/1501-childrens-sand-products-recalled-in-australia-due-to-asbestos/
Kennedys Law 2025, New wage theft laws: criminal offence introduced for intentional wage underpayments, Kennedys Law, Sydney, March, viewed 7 May 2026, https://www.kennedyslaw.com/en/thought-leadership/article/2025/new-wage-theft-laws-criminal-offence-introduced-for-intentional-wage-underpayments/
Modern Slavery Act 2018 (Cth).
Trace Consultants 2026, Modern Slavery Act: A Guide for Procurement, Trace Consultants, Sydney, April, viewed 7 May 2026, https://www.traceconsultants.com.au/thinking/modern-slavery-act-a-guide-for-procurement
WorkSafe Victoria 2026, Asbestos-containing fire rated boards, WorkSafe Victoria, Melbourne, viewed 7 May 2026, https://www.worksafe.vic.gov.au/safety-alerts/asbestos-containing-fire-rated-boards
If you want to review your supplier due diligence processes against the current regulatory environment, or you are preparing for a modern slavery questionnaire from a major customer, book a discovery call with D1 Advisory. No 47-slide deck. Just a clear read on where your exposure is and what to do about it. You can reach us at www.d1advisory.business/book-a-call.
Credentials are not proof. A CIPS membership and ten years of experience do not tell you what actually happened when the work was done. These case studies do.
Procurement has its own language. The definitions below are written for Australian SMB owners who need to understand these terms in practice, not for procurement professionals who already know them. Where a term has a formal procurement definition and a plain-language equivalent, both are given.
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