Nearly a million Australians have lodged their tax statements in little more than a week as they rush to receive rebates that the country’s central bank hopes will kick-start an ailing economy.
Australian lawmakers last week approved A$158 billion ($109.95 billion) worth of tax cuts over the next decade, which will first offer a $1,080 rebate to low-and middle-income earners.
Despite having four months to submit their tax statements, the Australian Tax Office (ATO) said it has already received around 800,000 declarations since the financial year ended on June 30.
The ATO said it will return rebates by the end of the week, potentially boosting consumer spending that remains subdued despite interest rates hitting a record low.
“It’s not up to the government to tell Australians how to spend their money, but I am confident this money will be used at the local shop,” Australian Treasurer Josh Frydenberg told reporters in Melbourne.
Economists have estimated the tax breaks will inject about A$7.5 billion into the economy over 2019/20.
Economists say the stimulus is desperately needed. Australia’s central bank has been forced to cut interest rates twice in as many months in a bid to boost domestic consumption.
But the central bank has warned monetary stimulus alone would not be enough to kick-start an economy that grew in the first quarter of 2019 at its slowest pace in a decade.
However, Australia’s conservative government has ruled out further fiscal stimulus, insisting its re-election campaign pledge to deliver the country’s first annual budget surplus was paramount.