UPDATE: As Australians welcome the new year, significant changes to government policies are reshaping household finances. Starting January 1, 2026, the cost of medicines under the Pharmaceutical Benefits Scheme will plummet from $31.60 to $25, marking the lowest co-payment since 2004. This move is set to save households over $200 million annually.
Alongside this reduction, payments for youth allowance and Austudy will rise by up to $17.60 every two weeks. Families can also expect an additional $26 every two years to assist with children’s dental costs. Furthermore, a groundbreaking 24/7 telehealth service, 1800MEDICARE, will launch, providing essential medical advice and potentially saving 250,000 Australians from unnecessary emergency room visits each year.
Prime Minister Anthony Albanese emphasized the importance of these changes. “We’re cutting the cost of PBS medicines because Australians shouldn’t have to worry about whether they can afford to fill a script,” he stated.
However, not all news is positive. The end of Commonwealth energy subsidies in 2026 means households will face the full brunt of rising electricity bills for the first time in over two years. This shift comes amid concerns that state and federal electricity rebates have contributed to prolonged inflation, despite their temporary relief on consumer prices.
In a further financial update, an alarming $11.6 billion overspend has been revealed in the government’s renewable energy subsidy program for home battery systems. In response, eligibility for the scheme will tighten, with the federal government projecting this will reduce the budgetary impact to $4.9 billion.
Sally Tindall, from financial comparison site Canstar, warns that while support payments will increase, the year ahead may bring challenges for borrowers. “If you have a mortgage, be prepared for a bumpy start to the year, as two major banks forecast a cash rate hike in February,” she advised.
Amid these financial shifts, a new federal mandate will require grocers and petrol stations with an annual turnover exceeding $10 million to accept cash for in-person transactions of $500 or less between 7 AM and 9 PM. Treasurer Jim Chalmers stated, “This will ensure Australians who depend on cash for fuel and groceries aren’t left behind.”
As these changes take effect, Australians are urged to stay informed about their financial landscape. The government’s initiatives aim to ease some burdens, but the impending rise in energy costs could create new challenges for millions. Watch for further developments as the year unfolds.
