Cost of Living Crisis: Aussies buy groceries and rent with tax refund, finds study
22 Jul 2019
More than a third (35%) of Aussies are using their tax return to catch up on essential purchases like food and rent, while just five per cent put their kickback into their savings account, a new study by MYOB has found.
The research, which surveyed the tax time behaviours of 1000 employed Australians, found that the majority relied on their tax return to supplement their annual income, while a quarter (25%) invested their cash, 16% used it to pay for a holiday and 15% didn’t get anything back at all.
Blake Collins, General Manager of Partners for MYOB, said the data could allude to issues with Australia’s cost of living.
“Accountants we work with tell us that Australians like to use their tax return as a kind of savings plan, so it’s a worry so many people aren’t getting the opportunity to put that money towards purchases or investments outside of life’s day to day,” he said.
“Research has found* that almost half of Australians rarely have any money to spare in their pay packet, which means nest eggs could be far away from top of mind. For those who do rely on that refund, our advice is to find a tax agent who can help you maximise your return.”
The research also uncovered that Australians like to time work-related expenses with the end of financial year to plump up their return (34%), with this behaviour most likely to be seen among Sydney-based residents (42%).
When asked how on top of their returns they were, the youngest Australians were most likely to be late to the party. Twenty-nine per cent of 25 to 34 year olds have previous tax returns they are yet to submit.
What Australians do with their tax return
· 35% catch up on essentials, like food and rent
· 25% invest it
· 16% pay for a holiday
· 15% don’t get anything back
· 12% pay for home furnishings, like furniture, white goods and technology
· 11% pay for home improvements, like plumbing or paint jobs
· 5% save it
· 5% buy something frivolous
· 3% pay off debit or credit cards, loans or mortgages
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MYOB is a leading provider of online business management solutions. MYOB makes business life easier for approximately 1.2 million businesses across Australia and New Zealand by simplifying accounting, payroll, tax, practice management, CRM, job costing, inventory and more. MYOB operates across three core segments – Clients and Partners (business solutions to SMEs and Advisers); Enterprise Solutions (larger businesses) and Payment Solutions. We also provide ongoing support via many client service channels including a network of over 40,000 accountants, bookkeepers and other consultants. We are committed to ongoing innovation, particularly through our Connected Practice Strategy and through the development of the MYOB Platform. For more information visit https://www.myob.com/au/ or follow @MYOB on Twitter.
About the research
The research was conducted by Gundabluey on behalf of MYOB between the 13 and 23 May 2019 and gathered the responses of 1086 Australian consumers.
*Source: finder.com.au 2019 – 46 per cent of Australians could be living pay to pay