Companies would get a tax break for donating spare food
Millions of households are struggling to afford food, while tonnes of good food is thrown out. This bill would pay companies back part of what it costs to give that food away.
Official name: Tax Laws Amendment (Incentivising Food Donations to Charitable Organisations) Bill 2026
- Companies could claim back 30 to 45 per cent of what they spend getting food to food charities.
- The biggest supermarkets and grocery wholesalers could not claim it. Wholesalers sell goods in bulk to shops.
- The tax break would last three years, unless the government extends it after a review.
- It is a private bill from Senator Dean Smith. It has not been debated yet.
Who it affects
- Farmers, food makers and smaller food businesses: You could get part of your cost back when you grow, store, pack or truck food for a food charity.
- Small companies with sales under $20 million: You could get 45 per cent back. You could get it as cash even if you pay no tax.
- Food charities like Foodbank: You could get more food given to you, because giving it away would cost companies less.
- The largest supermarkets and grocery wholesalers: You could not claim this tax break.
Hungry homes and wasted food
Food is getting more expensive, and more families are going without. In 2025 Foodbank Australia said almost 3.5 million households could not always get enough food in the past year. That is about one in three.
Foodbank also found 70 per cent of those households were facing this for the first time. Its 2022 report found 59 per cent of people asking for help had a job.
At the same time, Australia wastes 7.6 million tonnes of food a year. The senator's notes on the bill say about 70 per cent of that waste is still fit to eat. It is thrown out because that is cheaper than giving it away. Picking, packing, storing and trucking food to a charity all cost money.
Senator Dean Smith brought this bill to the Senate. The notes say the idea came from Foodbank Australia. They say the accounting firm KPMG tested the numbers in reports in 2020 and 2023.
The new tax break
The bill makes a new food donation tax break. It cuts the tax a company pays, dollar for dollar.
A company could claim a share of what it spends giving food to a food charity. That covers giving or selling food fit to eat to the charity. It also covers linked services, such as storing or delivering food.
The share depends on the company's total yearly sales. Companies with sales under $20 million get 45 per cent. Companies with sales from $20 million to under $50 million get 40 per cent. Companies with $50 million or more get 30 per cent. No company can claim more than $5 million a year.
Small companies can get it as cash. If the tax break is bigger than their tax bill, they get the difference paid to them. Bigger companies can only cut their tax to zero. But they can carry the rest to a later year.
Say a vegetable grower with $3 million in sales spends $20,000 a year. That money goes on packing and trucking spare vegetables to a food charity. The grower could claim $9,000 back.
What counts
Costs that count include growing or making, storing and moving the food that is given. Some costs do not count. These include general running costs, insurance, accounting, travel and paying for meals or entertaining. Costs already claimed under other tax rules do not count either.
The company needs a receipt from the charity. The charity must be signed up with the national charities body, the Australian Charities and Not-for-profits Commission. It must work to help people in need.
The biggest supermarkets and grocery wholesalers are left out. These are the large sellers covered by the Food and Grocery Code. That code is a set of rules for big supermarkets and their suppliers.
Rules to stop misuse
A company might get paid for the food. If so, it can only claim the cost above what it was paid. If it was paid the full cost or more, it cannot claim at all.
A company might buy services from a linked business at a price that is too high. If so, only a fair market price counts. Wear and tear on equipment like trucks does not count.
Three-year trial with reviews
The tax break would end 36 months after the law starts. The government could extend it with detailed rules, three years at a time.
The minister must order an outside review within each three-year period. The review must look at whether the tax break should keep going. The report must be shown to both houses of Parliament.
Waiting in the Senate
The law would start the day after it is signed. The Governor-General signs bills into law. The Governor-General is the King's representative in Australia. Companies could claim for tax years starting on or after that day.
Senator Smith brought the bill into the Senate on 7 September 2026. It has not been debated. It would need to pass the Senate and the House of Representatives, the other house of Parliament, to become law.
Its journey through Parliament
| 07 Sep 2026 | Senate: Introduced and read a first time |
| 07 Sep 2026 | Senate: Second reading moved |