The 2011 Bankwest Taxing Time Survey has shown that the average tax return is expected by consumers to be lower this year than last, and that many are planning to use returns to become more secure financially.

According to the survey, the average refund across Australia is expected to be $2,317, down 6% from last year’s figure of $2,473. While 80% of tax payers are expecting a refund, 42% plan to use it to pay off personal debt. A further 31% plan to save the refund, rather than spending it.

“It appears that people are using tax time as a catalyst to get their finances in order with the majority of tax payers using their refunds to pay down debt or to save,” said Vittoria Shortt, retail chief executive for Bankwest.

Shortt claimed that the figures indicate tax payers are becoming more prudent with the money they receive back from the Australian Tax Office. She also noted that there was an ‘encouraging’ trend emerging relating conservative spending, as the number of tax payers choosing to save their refund had grown for the second year in a row.

The results show that 16% of people plan to use their return for essential living expenses, while only 18% will spend it on ‘something exciting’. Of those planning the latter, 56% plan to spend on holidays, and 34% on consumer electronics.

“Interestingly, whilst a significant number of tax payers (29%) depend on the arrival of their tax return, the majority of people (71%) receiving a refund don’t rely on it,” Ms Shortt said.

The report also showed that Gen X tax payers would receive the highest average refund, approximately $2,821, with half of them planning to use the money to pay off debt. Similarly, 48% of Gen Y tax payers planned to use their returns to address personal financial concerns and pay off debt.

By state, New South Wales tax payers are expecting the highest return of around $3,225, with Western Australians expecting the lowest at $1,627.

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