Australians are less likely to spend their tax returns on luxuries and more likely to use it to pay bills and for other necessities as the cost of living continues to skyrocket, according to a new survey.
More than nine million Australians are set to receive a tax return this year, with the average individual refund expected to be about $1288 — with about $12 billion in refunds nationwide.
Financial comparison website Finder surveyed 1012 Aussies, and found almost half were planning to save their money rather than spend it.
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“Aussies are fed up with barely scraping by and are looking to their tax return to provide a bit of financial relief,” personal finance expert Sarah Megginson said.
“Many are struggling with debt, and a significant proportion of people plan to reduce that burden with their tax time cash injection.”
Almost one in four taxpayers said they would be using their tax return to pay for necessities such as electricity, while one in 10 plan to put it towards paying off their mortgage as interest rates remain high.
About 8 per cent of people said they intended to use the money to pay for a holiday, while 4 per cent said they would use the money to pay off their credit card.
Many Australians were increasingly needing to dip into, or even drain, their savings accounts during the past year as households struggled to cope with rising interest rates and the cost of living, Megginson said.
“Millions have had to dip into their emergency funds to keep up with bills,” she said.
“A tax return of a few thousand dollars can be a huge boost to help you catch up financially.”
Megginson also sent a warning to taxpayers to “think carefully” about how they use their tax time refund.
“After a couple of years of having to keep the purse strings tight, it can be tempting to splash out and splurge on little luxuries,” she said.
“But if used wisely, that money will give cash-strapped families a leg up.
“Finding ways to use that money to build wealth through investments or superannuation could lead to it being worth much more to you in the future.”