With the financial squeeze showing little sign of easing, millions of Australians are depending on their upcoming tax return to help them navigate another tough financial year.
According to fresh findings from comparison site Finder, around 47 per cent of Australians are expecting a refund after July 1. But instead of being splurged on luxuries, the majority of Aussies are funnelling these funds directly into essential expenses or savings.
The data highlights that more than half of those receiving a refund intend to put it straight into their savings. Meanwhile, 19 per cent say their tax return will help cover household bills, from energy and groceries to rent and school costs.
Only a small portion of Australians will allocate their refund to discretionary spending. Just seven per cent plan to use the money for a holiday, while six per cent aim to reduce their mortgage. Five per cent will treat themselves to some retail therapy. The rest are either paying down debt or investing in their future. Four per cent focused on credit card repayments, and one per cent is tackling Buy Now Pay Later obligations. Another two per cent are planning to invest their return in shares.
The subdued spending intentions come as no surprise. Households have been dealing with prolonged inflation, which has driven up costs by an estimated 17 per cent since late 2021. Essentials like petrol, groceries, rent, and electricity have consumed a larger share of income. This has forced many to dip into savings just to stay afloat. For many, a tax return represents a rare opportunity to restore some financial breathing room.
Finder’s financial analysts note Australians are prioritising resilience over indulgence. Many are using their tax refund as a way to rebuild depleted emergency funds. This behaviour underscores the psychological and financial value of having a buffer against unexpected expenses.
The broader economic impact of these tax returns is also significant. Finder estimates that around $15.3 billion will flow back into the pockets of everyday Australians as refunds are issued. While much of that money will be directed towards savings or bills, ripple effects could still benefit key sectors of the economy.
Nearly one in four people surveyed said their tax refund is crucial to their financial well-being. Another 41 per cent said it plays a moderately important role. In a climate of economic uncertainty, this annual cash injection is a financial lifeline for millions of Australians.
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