The Disorderly Houses Amendment Act 1995 legalised brothels and living off the earnings of a prostitute. With the passage of the legislation, a brothel then became a commercial business requiring local council approval under the Environmental Planning and Assessment Act 1979.

Current debate centers not so much on the morality of legalised prostitution and brothels, although this is still an issue, but more on how to close down brothels that are illegal. There are two mechanisms for local councils to close down an illegal brothel: the council, or any other person, may apply to the Land and Environment Court to remedy or restrain the breach of the relevant planning legislation; the second mechanism for a local council to close a brothel is through the Disorderly Houses Act . Under s.17 of the Act, a council may make an application to the Land and Environment Court for an order to close a brothel if the council has received sufficient complaints about the brothel to warrant making the application.

A Brothel Task Force was established by the Government, and reported in November 2001. The Task Force concluded that the regulation of brothels through the planning system can be an effective means of control, but that local government needed further support to optimise the potential of the planning system. In response, the Government established the Brothels Planning Advisory Panel. The Task Force also recommended amending the Disorderly Houses Act to clarify what evidence is needed in the Land and Environment Court to determine that a premise is operating as an (illegal) brothel. Amendments, allowing circumstantial evidence to prove that premises were operating as a brothel, were subsequently passed by the Parliament.

The brothel regulatory environment in other states is reviewed. In South Australia and Tasmania prostitution is illegal, while in the Northern Territory brothels are illegal but prostitution is not. In those States that have legalised prostitution and brothels, one of the main areas of debate is how restrictive the regulatory environment should be. Victoria, Queensland and the proposed reforms in Western Australia provide for a strict regulatory environment, requiring brothels to have both town planning permission and be licensed by a separate licensing authority. In NSW, brothels need town planning permission only. Somewhat ironically, critics of the ‘lax’ regulatory environment in NSW make reference to the enforcement regime in other jurisdictions. In other states, critics of the claimed restrictive regulatory environment hold NSW as the model for legislation.