A record number of Australians have lodged their tax returns in the hope of getting their hands on a hefty refund.
About 650,000 people have already filed their tax returns, with this year’s early rush attributed to the tax cuts passed in parliament last week.
Under the tax cuts, low and middle-income earners are expected to receive a tax return of up to $1080.
Those who have lodged their tax returns could see their money as early as next week, with staff at the tax office working through the weekend to get on top of the overload.
Returns filed electronically after expected to take about six days to two weeks to process, the Australian Taxation Office (ATO) said.
The government is hoping the tax cuts, along with the two consecutive interest rate cuts from the Reserve Bank of Australia, will prompt spending and give the economy a boost.
But mixed consumer confidence figures suggest many may choose to save the windfall instead.
Consumer confidence fell at the weekend, an ANZ survey suggested, as people appeared to view the Reserve Bank’s latest cut to the cash rate as a sign of worsening economic conditions.
The ANZ-Roy Morgan Australian Consumer Confidence index dipped 1.1 per cent from the previous week, with respondents’ perception of the economy, including the outlook for the next 12 months, retreating 3.6 per cent and prospects about conditions in the next five years sliding 1.7 per cent.
But the weekly measure of sentiment, which is based on about 1000 face-to-face interviews on Saturdays and Sundays, recorded a 3.7 per cent rise in how people felt about their financial condition compared with a year ago and a 1.3 per cent increase regarding their finances during the next 12 months.
The survey was taken after the RBA cut interest rates for the second month in a row on July 2 to a record low 1.0 per cent and follows the federal parliament’s approval of tax cuts on Thursday.
ANZ economist David Plank noted consumer confidence was lower after the most recent RBA decision and added the “passage of the tax cuts has also not been an immediate boost to sentiment”.
There was also a 4.6 per cent fall in the “time to buy a major household item” metric and the poll indicated a marginal increase in inflation expectations.
“Interestingly, confidence also fell immediately following the June RBA rate cut, suggesting the immediate takeaway from monetary easing is not necessarily positive,” Mr Plank said.
