Every year the retail sector waits with bated breath for your tax returns. But the last round of refunds weren’t splashed out on flat screen TVs and snazzy new shoes, they were put to much more sensible use, says new research.
With retail turnover increasing just 0.2 per cent in September and 0 per cent in October, it’s clear that the first round of tax refunds Australians received by late last year – around $1080 – failed to produce the predicted boost to the retail sector, according to the Australian Bureau of Statistics (ABS).
New research from Money.com.au confirms that 95 per cent of the 1066 adults surveyed who’d received their tax refund, didn’t spend it at the shops (in store or online).
Seven in 10 survey respondents had received their tax refunds by mid-November last year. When asked where they had spent or put most of their tax refunds, a third (33 per cent) said ‘into their savings accounts’, 28 per cent said ‘to pay their bills’, eight per cent spent their refunds on essential purchases, such as groceries and household repairs, seven per cent said ‘paying down their mortgage’, and six per cent paid off credit card debt, leaving just five per cent spending their tax return on in store or online purchases.
Of those who put their tax refund into their savings, over four in 10 (42 per cent) said they would keep it in their savings. More than half (54 per cent) of those over 50 will keep their money in their account and 26 per cent say they’ll eventually spend it on bills or essential purchases, 19 per cent said they will put it towards leisure activities and 13 per cent say they may eventually spend it on retail purchases.
“The lack of wage growth over the last few years and the rising costs of living have led to Aussies feeling the financial pressure,” said Money.com.au spokesperson Helen Baker.
“In previous years, people would spend their tax return on retail and leisure, but the findings reveal that the majority of us are struggling and are anticipating that the hard times will continue. As such, the tax refunds are simply helping us to get by now – helping us to catch up where we were behind or helping us in the future.
“Those in their 50s are also changing their mindset and thinking about their retirement and have only so many pay packets left.
“When we’re struggling to meet expenses, it’s easy to get caught in a cycle of debt. To reduce your interest payments in the short term, you could consider whether consolidating your debts into one loan or transferring your credit card debt onto a zero per cent balance transfer card is appropriate for you.”
What did you do with your tax return this year?
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