New prices, policies and potential cash rate hikes – what 2026 has in store
22 Dec 2025
The beginning of the new year will mark changes to a raft of policies, thresholds, prices and rules, which will leave some Australians better off, while others will pay more.
We’ve compiled a list of changes taking effect from Thursday, 1 January 2026, along with the vouchers and concessions that will be renewed, which could help families get ahead.
What can we expect in 2026?
While 2025 delivered three cuts to the cash rate, the year has ended with inflation back on the rise, putting the prospect of cash rate hikes back on the table.
Two of the big four banks are forecasting a hike in the official interest rate at the first RBA meeting of the year, while all four have ruled out further rate cuts.
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| Big four bank cash rate forecasts for 2026 | ||
|---|---|---|
| Bank | Change | Cash rate at end of 2026 |
| CBA | +0.25% | 3.85% |
| Westpac | – | 3.60% |
| NAB | 2 x +0.25% | 4.10% |
| ANZ | – | 3.60% |
What are some of the changes happening from 1 January?
Support payment increases:
- Youth Allowance and Austudy: will increase by up to $17.60 per fortnight.
- ABSTUDY: will increase by up to $30.80 per fortnight.
- Youth Disability Support Pension (under 21s): will increase by up to $17.20 per fortnight.
- Carer Allowance: will increase by $3.30 per fortnight.
Changes to the Medicare Safety Net thresholds:
- The Original Medicare Safety Net threshold is rising from $576.00 to $594.40.
- The Extended Medicare Safety Net for concessional cardholders will increase from $834.50 to $861.20, while for non-concessional cardholders, it will rise from $2,615.50 to $2,699.10.
PBS medicine co-payment reductions:
- General patient co-payments will decrease from $31.60 to $25.00.
Changes to the Child Care Subsidy:
- From 5 January 2026, families eligible for the subsidy will get at least 72 hours of subsidised child care per fortnight, or 3 days a week, regardless of how much they work, while families can get 100 hours if they work more than 48 hours a week.
Expansion of the Child Dental Benefits program:
- From January, the Child Dental Benefits Schedule will cover $1,158 every two years for eligible families, an increase of $26.
Reduction in total rebate for Cheaper Home Batteries Program:
- The value of Small-scale Technology Certificates (STCs) per kWh under the Cheaper Home Batteries Program will decrease from 9.3 to 8.4. However, the government has announced further funding for the program from May, with additional changes to eligibility
New rules for cash:
- From 1 January, it will be mandatory for grocery stores and petrol stations to accept cash payments for in-person purchases up to $500 between 7 am and 9 pm. Small businesses will be exempt.
Health insurance resets:
- The majority of health funds will reset annual limits on extras cover, including Bupa, Medibank, HCF, nib and more.
End of the federal energy rebate:
- The beginning of 2026 marks the start of rebate-free electricity bills for the majority of Australians who pay their bills quarterly.
Increase in passport price:
- Passport prices will increase, in line with inflation, with the cost of a 10-year passport currently $412.
NSW road changes:
- The $60 toll cap will be made permanent, allowing NSW motorists who spend between $60 and $400 on tolls per week to claim a rebate of up to $340 per quarter.
- The trial Demerit Point Reward Program will be made permanent, slated for February. This means unrestricted licence holders who incur no traffic infringements for a full calendar year will have one demerit point removed from their licence.
Victorian public transport price hikes, with some concessions:
- Metro public transport fares are on the rise, including the daily fare cap which will increase from $11.00 to $11.40 on weekdays and, on weekends, from $7.60 to $8.00. See the list here.
- From 1 Jan, people under 18 with a youth myki card can travel free of charge, while concession card holders can travel for free on weekends.
Voucher schemes renewed:
State government sport or activity vouchers are an excellent way for families and, in the case of Tasmania, older Australians to participate in community sport and recreation at a lower cost.
The start of the new year typically sees a renewal of the range of vouchers available in each state. Note that eligibility applies, including specific time periods for voucher activation and use.
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| Sport and activity vouchers available in each state | ||
|---|---|---|
| State | Voucher | What is it + eligibility |
| New South Wales | Active and Creative Kids | Two $50 vouchers for school-aged families who are receiving Family Tax Benefit A or B. One voucher is available from 15 January for use by 31 December of the same year; the second is available from 15 July for use by 14 July of the following year. |
| Victoria | Get Active | The next round of Get Active vouchers, which provide up to $200 to cover registration or membership fees, will open in February 2026. |
| Queensland | Play On! Sports Vouchers | Round two of Play On! Sports vouchers are scheduled to open in early 2026, with the $150 voucher, available for children aged 5 – 17, for use toward sport and recreation programs. |
| Back-to-school boost | $100 credit per student (Prep-Year 6) applied to all student accounts for fees, uniforms, or excursions (applied differently to non-state schools). | |
| South Australia | Sports Voucher Plus | Two $100 vouchers per child (reception-Year 9) per calendar year to help cover sports, recreation and music with the new vouchers available from 2026. |
| Western Australia | Kids Access All Areas | A $50 voucher per child (aged 5-15) is available to use at more than 100 arts and cultural events in WA. Opened 11 Dec 2025. |
| Tasmania | Ticket to Wellbeing | Expected to renew in early 2026. Available for anyone aged 65 or older living in Tasmania with eligible concessions to apply for a $100 voucher to go toward the cost of sport and active recreation registration and/or membership. |
| Northern Territory | Learn to Swim voucher | The next round of $100 Learn to Swim vouchers for children under five who are not yet enrolled in school will be available from 1 January. Two vouchers are provided each year, one in January and one in July. |
| Sports Voucher Scheme | School-enrolled students in eligible areas can apply for two $100 Sport Vouchers per year, in January and July. | |
| Back to School Payment Scheme | Families can receive $200 of educational goods and services for each child enrolled in school or preschool, given in the first term and must be used by the third term. | |
Bumpy start to the year
Canstar’s data insights director, Sally Tindall, says, “This year has delivered relief for borrowers in the form of three cash rate cuts, however, much of this could be clawed back if the RBA reverts back to hikes in 2026.”
“If you have a mortgage, know that it might be a bumpy start to the year, with two major banks now forecasting an increase to the cash rate in February.
“The cost of living has started to reaccelerate and unfortunately, this is unlikely to turn around any time soon, impacting everyone across the country, but those on the lowest incomes the most.
“The annual indexation of key support payments will be welcome news for those who rely on these to help pay for everyday essentials as costs continue to climb.
“Finally, take time in the New Year to set up, not just a budget, but also financial goals for the next 12 months. Having a strategy for your finances will give you a clear idea of what you want to achieve in 2026 and a better understanding of the steps you’ll need to take to get there.”
2026 financial tips and tricks
- Slash your grocery bill without stripping back your shopping list: Canstar research shows that the average family of four spending $260 a week on groceries can potentially save over $2,000 a year by switching half of their weekly shop to cheaper brands at the supermarket.
- Reassess your mortgage: Know that the average owner-occupier variable rate is 5.51%. If you are paying a rate higher than this, or even if you’re just under this mark, ask your bank for a rate cut or consider refinancing.
- See what concessions and rebates are available to you: From family tax benefits, parenting payments and Commonwealth Rent Assistance – lower income earners and concession card holders should check what they might be eligible for.
- Understand the Medicare Safety Net thresholds: If you hit the threshold, you might be eligible for larger rebates on your medical bills for the remainder of 2026, but you’ll need to link your family’s accounts for the purposes of the threshold, if you haven’t already.
- Use up your rewards points: Stockpiling rewards points can make you feel rich but if they’re not being used they could actually be losing value. A total of 100,000 Everyday Rewards or Flybuys points currently translates into $500 off your Woolies or Coles shop.
- Check what your health fund refunds: If you have extras cover, understand what you can and can’t claim. Some funds will cover things like learn-to-swim lessons and weight management courses, and you can typically claim receipts for up to two years.
- Embrace hand-me-downs: Even if your children are at an age where they care about labels, you can find some great deals on Facebook marketplace or Gumtree – clothes, sporting equipment, school uniforms.
- Lean on your library: From newspapers to audiobooks, even kids toys, your local library is often a free treasure trove of educational and entertainment resources.
- Conduct a beginning and end of year review: Reflect on what worked, update your budget, and set fresh financial goals for the year ahead.
This article was reviewed by our Finance Editor Jessica Pridmore before it was updated, as part of our fact-checking process.
