Almost half of Australian consumers (48%) plan to save their tax return for a rainy day this year, more than one in three (35%) plan to use it to catch up on bills and 34% will invest it, according to research from business management platform MYOB. Ten per cent plan to buy something frivolous and 13% will use their refund to pay for a holiday.
The survey of 1000 employed consumers also revealed 65% of respondents are spending less on dining out and food delivery, and 62% are cutting back on entertainment and events, in response to the rising cost of living.
MYOB’s General Manager SME, Emma Fawcett, said the research suggests challenging headwinds for many small businesses heading into tax time, particularly those offering ‘non-essential’ products and services.
“EOFY can provide a boost for small businesses as consumers look to take advantage of tax time deals or to treat themselves with their tax refund. Our research indicates this may not be the case in 2024 with many opting to batten down the hatches amid rising cost of living pressure.
“Hospitality and entertainment businesses are likely to feel the effects most acutely as consumers tighten their purse strings on ‘non-essential’ or luxury items.”
Alice Bennett, founder of cake-baking business Miss Trixie Drinks Tea shared her insights on what business owners are experiencing on the ground and how she is adapting to meet the market.
“We’re definitely feeling the impact of the current economic environment. The post-pandemic cash splashing has well and truly run out of steam and customers are less inclined to order premium bespoke creations, instead opting for more budget friendly options that still have some magic. We’re also seeing a lot of couples skip the wedding cake as a saving measure.
“The cost of ingredients has gone through the roof meaning our butter isn’t going as far as it used to, so we’ve had to innovate and be creative to make the finances work. We launched a merch line which sold out, have been offering customers an extra cookie or two to increase average transactions and we’ve put on events that have gained traction,” Alice said.
The 2024 Federal Budget committed to address cashflow and cost of living pressures for small and medium sized enterprises (SMEs), through the provision of a $20,000 instant asset write off extension for businesses with turnover of less than $10 million to 30 June 2025 and energy bill rebates of $325 for around one million businesses.
“These measures will help provide some relief for businesses, both with direct savings as well as seeing consumers have a little extra to spend themselves,” said Emma.
“Despite the current challenges it’s promising to see the entrepreneurial spirit of Australian business owners shining through.
“Australia’s 2.5+ million small businesses are the lifeblood of the economy employing over 7.4 million Australians and making up 99% of Australian private enterprises. I’d encourage all those who can to consider SMEs in their purchasing decisions.
“Helping SMEs thrive is vital not only for our vibrant business community, but also the economy overall.”
ENDS
For further comment or other information please contact:
Jacob Schnackenberg, Communications Specialist
Jacob.schnackenberg@myob.com
About MYOB
MYOB is a leading business management platform with a core purpose of helping more businesses in Australia and New Zealand start, survive and succeed. MYOB delivers end-to-end business, financial and accounting solutions direct to businesses employing between 0 and 1000 employees, alongside a network of accountants, bookkeepers and consultants. For more information visit myob.com or follow MYOB on LinkedIn.