Tax incentives will provide extra meals and cut waste

A homeless person could have an extra meal every day for more than two years, under proposed tax changes to motivate businesses to donate more food and cut waste.

Foodbank chief executive Brianna Casey says under the current rules, the tax system treats donating food no better than dumping.

Fixing transport logistics issues for businesses could unlock an extra 100 million meals a year, she told a parliamentary inquiry on Wednesday.

"It's often cheaper for them to dump unsellable but perfectly edible food rather than donating it, owing to the costs related to sorting, packing, storing, transporting," she said.

Changes to tax rules would provide offsets for companies for expenditure incurred when making donations to registered food charities.

Around 122,500 people nation-wide are homeless, according to the Australian Bureau of Statistics, and more than 7.6 million tonnes of food is wasted every year.

The $50 million threshold stipulated in the bill should be increased to allow for all medium-sized businesses to be eligible for the 40 per cent offset rate, Ms Casey said.

"This proposed tax incentive aims to shift the dynamic by allowing companies to offset the expenses associated with donating food, enabling the diversion of millions of meals from landfill to the plates of those who need it," Ms Casey said.

"The transport-logistics challenges are a huge barrier to us being able to receive more donated product."

KPMG's Tax Policy Lead Alia Lum said the consultancy firm recommended extending the type of entities that can claim, including trusts and partnerships.

It would make it clearer for entities such as family farms that often operate through trust structures and also small businesses.

"The introduction of the food donation tax incentive will enable an estimated $2 billion per annum in social, economic and environmental benefit and positively contribute to Australia's ambition to halve food waste by 2030," she said.

The parliamentary committee will report back in November.