Bleak new data from comparison site Finder reveals how critical tax returns are for Aussies during cost of living crisis
Fresh research from comparison site Finder shows how Aussies plan on using their tax return – which is estimated to be more than $1500 for those expecting a refund.
Of those anticipating a refund, 52 per cent said the cash injection will go straight into their savings while 19 per cent said they would use the windfall to pay for household bills.
Just seven per cent said the cash was going towards a holiday, while six per cent were paying off their mortgage and five per cent were going shopping.
It comes as 47 per cent of Australians expect a return – equivalent to more than 10 million individuals – after July 1.
Finder's personal finance expert Sarah Megginson said households were focused on covering the essentials with their tax return as price pressures ate into budgets.
"It's been a tough stretch for households, and many are counting on their tax refund to ease the pressure on their budget just a little,' Ms Megginson said.
"For a lot of people, a refund acts as a kind of forced savings – especially when they're only just making ends meet each month."
Many Aussies also anticipate using their tax return to pay off debts.
About four per cent plan to pay off credit card debt with their return while one per cent said the cash would be used to pay off Buy Now Pay Later loans.
Another two per cent said they would invest their return in shares.
Ms Megginson said many families had eaten into their savings over the past few years amid struggles with soaring inflation.
"Millions of Australians have had to dip into emergency funds just to pay for basics like petrol and electricity,' she said.
"A few thousand dollars back at tax time can be a real lifeline for families working to rebuild their financial footing.
"The peace of mind that comes with having an emergency buffer can't be overstated – so using a tax windfall to rebuild that safety net is always a smart move."
The cumulative impacts of inflation over the past three and a half years means things are about 17 per cent more expensive than in late 2021.
Finder's new research on how Aussies will use their tax return follows the comparison site revealing a total of $15.3 billion will go back into the pockets of everyday shoppers across the nation after tax returns are issued.
Almost one in four respondents to Finder's survey said a tax refund was very important to their financial health while 41 per cent said the cash was somewhat important.
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