Contact us
Log in
A tax incentive to ensure food ends up in bellies, not bins…
while also protecting our environment.
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.
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.
What is proposed?
Western Australian Senator Dean Smith has tabled a Private Senator’s Bill, the Tax Laws Amendment (Incentivising Food Donations to Charitable Organisations) Bill, in the Senate.
The bill proposes amending the Income Tax Assessment Act 1997 and Income Tax (Transitional Provisions) Act 1997 to provide a tax offset for companies’ expenses related to food donation activities for registered food charities.
The proposed incentive takes the form of a cashback (<$20m turnover) or tax credit ($20m to $50m turnover) above what’s available to a company for disposal of the stock. It would only be a proportion of the costs incurred but will tip the scales when businesses are considering whether to donate or dump.
How would it work?
Example of how the incentive would work for a small enterprise is:
A farmer operating a business with a turnover of less than $20 million has 500kg of zucchinis that cost $1.50 per kg to grow and harvest but they are in excess of customer demand due to a better-than-expected growing season. Instead of dumping the zucchinis, the farmer engages a local transport company at a cost of $250 to deliver the zucchinis to a food relief organisation. The total cost to the farmer of $1,000 would enable him to receive an additional tax refund of $200.
Where to from here?
Senator Dean Smith’s Bill was the result of growing bipartisan attention for what has been described as ‘smart policy’. The Labor-chaired House of Representatives Standing Committee on Agriculture’s Food Security Report included the provision of the tax incentive as one of its recommendations, as did the Select Committee on Cost of Living in its Second Interim Report.
The Bill has been referred to the Senate Economics Legislation Committee for review and a call for submissions has taken place. Thanks to all those who responded to the call providing support for the Bill with some amendments.
The Committee will report back to the Senate by 15 November with its recommendation.
Help us to create meaningful change
Sign up here to receive updates on the progress of the proposal and information on what you can do to support it.
Background
