Small businesses hoping for spending boost at tax time

Small businesses are hoping for a spending boost next month fuelled by tax returns starting to land in the pockets of Australians.

Founder and owner of Goldelucks Bakery in Melbourne's east Phillip Kuoch said this financial year had been a challenge.

"As a small business owner, you're definitely feeling the pinch, both personally and in business," Kuoch told 9News Melbourne.

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"We've definitely noticed this year that people are spending less."

New MYOB data shows almost half of those who receive a tax return will save it.

It is estimated 35 per cent of people will use it to pay down debt and just 10 per cent will spend it on something non-essential.

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"We would normally see a much higher percentage of people likely to spend that end of year tax return and I think for our small business community that implies some pretty tough times ahead," Emma Fawcett from MYOB said.

In the current cost of living crisis, businesses need a spending boost and households need a savings boost.

About two-thirds of Australians will get a tax return and from July 1 all will receive a tax cut.

Super funds are urging Australians to put their tax return towards retirement so it grows.

"It's going to mean $50,000, $60,000, $70,000 extra in your super," Australian Super education manager Peter Treseder said.

"And if you put a little bit more of your own money in, the results can even be better."

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