That figure marks a 16-month high - far worse than markets had predicted.
From energy relief and medical bills to tolls and passport fees, sweeping changes will hit Australians' wallets as 2026 begins.
Goodbye to the energy rebate...
Labor will scrap its energy rebate relief package in 2026, Treasurer Jim Chalmers has confirmed.
The scheme gave households a $300 rebate from the Energy Bill Relief Fund for 2024–25, paid in four quarterly instalments of $75.
The scheme will officially end on December 31, 2025.
Treasurer Jim Chalmers has confirmed there will be an end to the energy rebate relief package on December 31, 2025
'This shift is from temporary measures, first decided when inflation was almost eight per cent, to a shift towards ongoing cost of living help,' Chalmers said.
'The Commonwealth has spent almost $7billion on these three rounds of energy bill rebates, the states and territories have kicked in another one and a half billion or so.
'These were a really important way that we provide help with the cost of living, but they're not the only way that we're providing that cost of living relief for people who are still doing it tough.'
From January 1, social security payments will increase in line with inflation for people receiving youth allowance, Austudy, ABSTUDY, Youth Disability Support Pension and Carer Allowance recipients.
The payments are indexed every year to keep pace with rising costs.
A single adult living away from home without dependants will see their maximum Youth Allowance rise to $677.20 per fortnight, an increase of $13.90.
The cost of living continues to rise, with the latest data in November revealing the inflation rate had surged to 3.8 per cent in October year-on-year (stock image of an energy bill)
Albanese announced in July that PBS prescriptions will be capped at $25 from January 1 for the first time since 2004.
Pensioners and concession cardholders will keep paying $7.70 per script, with the freeze locked in until 2030.
A three-day childcare guarantee
From January 5, the Child Care Subsidy (CCS) activity test will be scrapped.
All CCS-eligible families will receive at least 72 hours of subsidised child care per fortnight, the government confirmed in October.
Some families can get 100 hours of subsidised child care each fortnight.
This applies to families caring for an Aboriginal or Torres Strait Islander child, those with over 48 hours of recognised participation per fortnight, or those facing exceptional circumstances - including recipients of Additional Child Care Subsidy for child wellbeing, temporary hardship or grandparent care.
Drivers on toll roads in Brisbane as well as Victoria and New South Wales will see increases
Changes to health systems
From January 1, the my health app will be renamed 1800MEDICARE.
On the same day, the Australian Centre for Disease Control (CDC) will become an independent agency to better manage public health emergencies.
'The new CDC will bring together the best science and expertise to provide trusted, evidence-based advice that protects people and communities across the country,' the announcement said.
It has also been announced that the Original Medicare Safety Net threshold will increase from $576 to $594.40 on January 1.
The Extended Medicare Safety Net threshold will increase from $834.50 to $861.20 for people who have a concession car or get Family Tax Benefit Part A.
There will also be a rise from $2,615.50 to $2,699.10 for other recipients.
Australian passports, which are the most expensive in the world, will cost more (stock image)
But, thanks to a mandated annual adjustment, this is due to rise on January 1, by an estimated $5 to $10.
This means the average passport will then cost between $417 to $422.
Those who lodge applications for a new passport before the change will be charged the 2025 fee, even if their official document is printed or delivered in 2026.
However, businesses are increasingly not accepting cash.
From January 1, it will be mandatory for fuel and grocery retailers to accept cash when they sell these essential items during in‑person transactions of $500 or less between 7am and 9pm.
Small businesses with an annual turnover of $10million will be exempt from the mandate, but it will apply to those who share a trademark with a larger retailer.
Changes to apprenticeship support
The Key Apprenticeship Program Employer Incentive payment designed to help skilled workers meet clean energy and housing targets will start on January 1.
It will see incentive payments of up to $5,000 paid in two instalments during the first year of the apprenticeship.
However, the incentive for those hiring full-time apprentices from the 'Priority List' of skilled occupations will reduce from $5,000 to $2,500, over the first two years.
From January 1, it will be mandatory for fuel and grocery retailers to accept cash when they sell these essential items (stock image)
Road tolls on the rise
Drivers on toll roads in New South Wales will see routes become more expensive as of January 1, as part of a quarterly increase.
This includes the Cross City Tunnel, Eastern Distributor, Hills M2, M5 South-West, Lane Cove Tunnel, Military Road E-Ramp, NorthConnex and Westlink M7.
Drivers on the Eastern Distributor will be slapped with the highest minimum toll charge at $10.26.
Those travelling more than 16km on the WestConnex during a single trip will be capped at a maximum of $12.74 while heavy vehicles will be capped at $38.22.
In Victoria the maximum price for a CityLink toll will increase to $12.38 for cars on January 1. It will be $55.71 for long heavy commercial vehicles, which are equal to or longer than 26m.
A 24-hour CityLink pass will cost drivers $23.75. Light commercial vehicles and motorcycles will pay $51.50 and $11.88 for the same pass.
In Queensland, the tolls on AirportlinkM7 in Brisbane will increase, with the highest minimum toll point for class 1 vehicles at Bowen Hills - Kedron, and Bowen Hills - Toombul ($3.58).