New year brings cheaper medicines, higher energy bills
As Australians wake up to a new year, changes to government payments and policies will impact the finances of millions of households.
Starting Thursday, the maximum cost of drugs covered by the Pharmaceutical Assistance Program will be reduced from $31.60 to $25; This is the lowest contribution since 2004, saving Australians over $200 million each year.
The cost of living measure announced by the Albanian government in July comes into effect at the same time that a number of support payments are automatically increased in line with indexation.
Youth allowance and Austudy payments will increase by up to $17.60 a fortnight, while fortnightly payments for people receiving youth disability benefits will increase by up to $17.20.
Eligible parents will also receive an extra $26 every two years for their child’s dental expenses; Starting January 5, eligible families will receive supported child care at least three days a week.
1800MEDICARE, a free 24/7 nationwide telehealth service, will also launch Thursday.
The service is expected to save around 250,000 Australians each year from unnecessary trips to hospital emergency rooms, with registered nurses available to provide advice around the clock to all Medicare cardholders.
“There’s a reason the Medicare card is green and gold,” Prime Minister Anthony Albanese said.
“Medicare is the best of the values Australia has put in place – people, no matter who they are, are looked after when they need it.
“We’re lowering the cost of PBS medications because Australians don’t have to worry about whether they can fill a script.”
But not all changes will make households better off.
The Commonwealth’s energy subsidies will end in 2026, meaning households will pay the full price of their electricity bills for the first time in more than two years.
Economists say varying state and federal electricity rebates contribute to keeping underlying inflation higher for longer, even as they lead to a mechanical decline in the headline consumer price index.
The federal government also sought to roll back some of its largesse on renewable energy after it was revealed that a subsidy program for home battery systems had increased by $11.6 billion over four years due to higher-than-expected demand.
The scheme will now be capped and compliance tightened, which is estimated to reduce the budget blowout to just $4.9 billion.
When announced in early 2025, the plan cost $2.3 billion.
Sally Tindall, director of data analytics at financial comparison site Canstar, said the annual indexation of support payments would be welcomed by those relying on it, but with interest rate rises on the horizon, 2026 could mean bad news for borrowers.
“If you have a mortgage, know that this could be a bumpy start to the year, with two major banks predicting cash interest rate increases in February,” he said.
“The cost of living has started to rise again and unfortunately this situation is unlikely to improve any time soon, it will affect everyone across the country, but those on the lowest incomes the hardest.”
Starting Thursday, convenience stores and gas stations will be required to accept cash as a federal government mandate goes into effect.
“This will ensure Australians who rely on cash for fuel and food are not left behind,” said Finance Minister Jim Chalmers.
The change means businesses with an annual turnover of at least $10 million must accept cash for in-person transactions of $500 or less between 7 a.m. and 9 p.m.
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