MEDIA RELEASE – 29 September 2020
On this inaugural United Nations landmark day, Foodbank Australia, KPMG Australia (KPMG), and the Fight Food Waste Cooperative Research Centre have put their support behind changes to Australia’s taxation legislation so that more food businesses will donate surplus food to food relief charities rather than it going to waste.
Catherine Dean, KPMG Tax Partner, said “Currently, it is often more practical and cost effective for businesses to discard food rather than to donate it. Given that the costs of immediately disposing of food can be far lower than the cost incurred in donating food, and the tax deductions allowed for donating food compared to simply discarding food are the same in many instances there are not incentives for success.”
KPMG Partner, Consumer and Retail Sector Lead Robert Poole, said that the experience of other countries has shown that the most effective way to support the food industry to do the right thing is via reforms to the tax system.
“We can certainly see the benefit of tax reform in this area, in particular it would be a tipping point for the many small food businesses who want to do the right thing but just don’t have the margins to make it work.”
Fight Food Waste Cooperative Research Centre Chief Executive Officer, Dr Steven Lapidge, said that tax specialist KPMG are providing advice to Foodbank Australia as part of this latest project.
“On this United Nations day of awareness, we are really proud to be announcing the outcomes of this collaborative project where recommendations from the report have been submitted to the Treasurer aimed at boosting the volume of food and related services, such as transportation and storage facilities, being directed to food rescue charities”, he said.
“Australia’s current tax framework does not adequately motivate retailers, manufacturers and producers to donate surplus stock – in fact, it is no better than if they send it to landfill. This has to change. If tax settings were recalibrated to incentivise donations to food relief, industry would be supported to donate surplus stock.
“Proposed reforms to the tax legislation will increase the volumes of surplus, safe, near date food to food relief and divert it away from landfill, as tax exemptions and deductions have the capacity to incentivise and facilitate meaningful and appropriate giving.”
Foodbank Chief Executive Officer, Brianna Casey, said that food relief in Australia is delivered via a partnership between the charity and food sectors with food donated by industry to food relief organisations, such as Foodbank, being distributed to front line charities for dissemination to the public.
“But, there is currently not enough food being redirected with only 37% of charities saying they are meeting the full needs of food insecure clients. This is a gap that will only increase during the economic recovery from COVID-19 if the need to expand food relief efforts is not addressed. We know there is plenty more food out there for donation. However it currently just doesn’t make good business sense for a lot of industry to donate this to us”, she said.
“If these donations could be incentivised through tax reform, then the sums will add up for a lot more Australian food businesses.
“At the same time as being an innovative industry-based mechanism to meet the growing demand for food relief and emergency support in Australia, these reforms would assist in reducing food waste and support industry, particularly small enterprises such as farmers, during these tough times.”
The Fight Food Waste Cooperative Research Centre launched in July 2018, and brings together industry, research and the community to capitalise on Australia’s food waste opportunities. Winning this fight can save Australia $20 billion per annum in wasted food. Through its three research and development programs, the Fight Food Waste CRC will REDUCE food waste throughout the supply chain, TRANSFORM unavoidable waste into innovative products, and ENGAGE with industry and consumers to deliver behavioural change.
The Fight Food Waste CRC is funded by the Australian Government’s Department of Industry, Science, Energy and Resources as part of the CRC Program that supports industry-led collaborations between industry, researchers and the community.