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Taxpayers rush ATO for early returns to cope with COVID-19 recession

Mr Frydenberg said tax refunds would deliver a boost to the incomes of many Australians.

“Millions of Australians across the country are set to benefit again this tax time from the government’s tax cuts,” he said.

“It means people can keep more of what they earn, providing a much-needed boost to the household budgets.”

Last year there was a surge in early tax lodgements as people sought to access the beefed-up low- and middle-income tax offset.

The offset ranges between $255 and $1080 for people earning between $37,001 and $126,000. By the end of October, $24.2 billion of refunds had gone out to taxpayers, a jump of almost 30 per cent on the same period in 2018.

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Despite this, retail spending failed to lift as expected by government and private sector economists.

In October last year, actual retail spending rose less than in 2018, despite the extra tax refunds.

The government expects more than 4.3 million people will get the full payment, of which 1.3 million are in NSW and 1.1 million in Victoria. Mr Frydenberg said more than 10 million people would gain some benefit from the low- and middle-income tax offset.

The biggest winners are expected to be in the two regional Queensland electorates of Wright, where more than 101,000 people are forecast to qualify, and Kennedy, where 91,138 should get the refund.

In NSW the electorate tipped to do best is Sydney (87,223 people), while in Victoria the Melbourne seat of Lalor has 79,711 taxpayers who should qualify.

The first lot of refunds should hit taxpayers’ bank accounts from Monday.

The government is considering bringing forward its legislated tax cuts for 2022 and 2024 by at least one year in its October budget, to help the economy through the recession. Combined, those tax cuts are worth $25 billion a year.

Mr Frydenberg will release a budget and economic update next week, which is expected to confirm the 2019-20 budget showing the largest deficit on record at more than $90 billion.

The current year’s deficit is forecast by some economists to reach $240 billion.

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