OP - it is not really to do with refunds of tax at all for an individual.

Most have those earmarked for special buy's etc as it is only once a year.

EOFY is the time that businesses (employers) have an indication of the budgets they have to spend for the next FY. This in turn can determine staff lay off's, staff hiring, increase/decrease production etc the list goes on.

If business is picking up, the hope (as in things will pick up after EOFY we talk about) is hinged on the belief that employee's will feel secure in the job they have and hopefully spend more freely rather than saving it for the worst case scenario.