Millions of Aussies counting on tax break in cost of living crisis

Millions of cash-poor Australians are counting on a tax refund to give them some financial breathing room this year, underscoring how tight the average household budget has become.

Research from comparison site Finder showed 38 per cent of Australians – more than 8.1 million people – expect a tax refund this year.

Of those, 18 per cent (an estimated 1.5 million) say a refund is “critical” to their financial wellbeing.

That’s more than double the number of respondents who said the same thing last year.

Another 35 per cent of people hoping for a refund said a tax refund was “very important” to their financial health, and 29 per cent say it’s “somewhat important”.

“For households stretched to the limit, a tax refund starts to look more like a financial lifeline than a nice little bonus,” Finder money expert Richard Whitten said.

“Many Australians have little room left in their budgets, so an extra few thousand dollars can make a major difference.”

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He said the fact that the number of people for whom a tax refund was critical had doubled in 12 months showed the “massive pressure” households were under.

Finder’s survey also revealed women were feeling the financial pinch the most, with 60 per cent admitting their tax refund was “critical” or “very important”, compared to 47 per cent of men.

Whitten said many taxpayers would use a refund to cover essential expenses and rebuild their financial buffer.

“For some, this money will go straight towards overdue bills, debt repayments or topping up savings that have been depleted by rising living costs,” he said.

“A tax refund can provide some much-needed breathing room, but it’s important to think carefully about how you use it.

“Consider using the funds to pay down high-interest debt, boosting your emergency fund or making a contribution to your superannuation.

“This turns a short-term cash injection into long-term financial security.”

Finder’s research showed just 18 per cent of respondents said this year’s tax refund is “not important” to their finances, while 15 per cent expected a bill instead of a refund.