Food Donation Tax Incentive

What is the issue?

Australia currently wastes more than 7.6 million tonnes of food each year, costing the economy over $36.6 billion. 70% of this food is perfectly edible.

Despite this, Australia’s current tax framework does not support the food industry to donate surplus stock to food relief – in fact, it treats this the same as sending it to landfill. This needs to be changed.

What is proposed?

In July 2024, Western Australian Senator Dean Smith introduced the Tax Laws Amendment (Incentivising Food Donations to Charitable Organisations) Bill 2024 in the Senate. This Bill proposes amendments to Australia’s tax laws to incentivise small and medium-sized food producers, such as farmers and growers, to donate surplus fresh food to registered food charities.

The proposed tax incentive would provide a cashback or tax credit for businesses based on the costs incurred in donating food.

It would only be a proportion of the costs incurred but will tip the scales when businesses are considering whether to donate or dump.

Independent modelling shows that this incentive would potentially save the equivalent of an additional 100 million meals a year and could assist in halving overall food waste by 2030.

Similar incentives are already effective in countries such as the United States, Canada and France.

Where to from here?

In November 2024, the same week that two government reports were handed down, both recommending the adoption of the food donation tax incentive as a targeted non-inflationary measure to address cost of living pressures, the Senate economics committee rejected the Bill that would have brought the incentive to life.