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Surprise plan Aussies have for tax cut cash

FEDERAL BUDGET 2024: AUSTRALIA - NewsWire Photos - General view editorial generic stock photo of Australian cash money currency. Picture: NCA NewsWire / Nicholas Eagar
Australians will get a tax cut from July 1. Picture: NCA NewsWire / Nicholas Eagar

A majority of Australians will use their impending Stage 3 tax cut to save money or beat back cost-of-living pressures rather than splurge on one-off items, a new survey shows.

From July 1, Australians will pocket between $350 and $4500 in extra cash each year depending on their income bracket as part of the tax cut package.

Banking behemoth NAB estimates more than a third, or 36 per cent, plan to save extra money rather than splurging on non-essentials.

A majority of Gen Z Australians, or 53 per cent, will save rather than spend and 49 per cent of those earning between $100,000 and $150,000 will likely choose frugality over extravagance, the bank’s data shows.

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Some 29 per cent plan to beat back higher living costs with the cash boost while 22 per cent will use it to pay down debt.

Under $35,000

$350

$35,000-$50,000

$750

$50,000-$75,000

$1200

$75,000-$100,000

$1900

$100,000-$150,000

$3000

$150,000-$200,000

$4000

More than $200,000

$4500

Source: NAB

One in three Australians are saving for a holiday or adding to a rainy-day fund, while one in four are saving for a home and one in five for retirement.

Almost eight in 10 said they were trying to save more money and on average, Australians are looking to get to about $17,000 in savings.

NAB personal banking executive Paul Riley said the plan to save rather than spend Stage 3 would help in the “fight against inflation”.

“Despite cost-of-living pressures, Australians have been prioritising their savings wherever possible over the last year or so,” he said.

“The money people expect to get back from stage 3 tax cuts will help supercharge their savings or rainy-day funds.

PEOPLE in SUITS STOCK
A majority of Australians will look to save rather than spend their Stage 3 tax cut, NAB says. Picture: NCA Newswire / Gaye Gerard

“Three quarters of NAB deposit and savings accounts are now opened digitally and household deposits have grown by 6.4 per cent over the last year.

“High interest savings accounts can be a safe, smart and stable way to manage your money, providing ready access to funds if they’re needed, as well as a rewarding interest rate.

“Many Australians are also keen to use the money from these tax cuts to give their household budgets, which are under pressure from the cost-of-living crunch, some much-needed breathing room.

“Fewer Australians are planning to splurge their tax cuts, which is welcome news in the fight against inflation.”

The data is sourced from the bank’s Q1 Australian wellbeing survey of 2000 Australians.