19 January – A hailstorm accompanied by severe winds sweeps through Brisbane and surrounding areas, causing an estimated $110 million of property damage. Subsequently, around 95,000 insurance claims are lodged.
28 January – Victorian Premier John Cain's support for reforms to the Upper House rather than its abolition defuse this as an election issue.
29 January – Federal Cabinet endorses an earlier decision to provide refuelling facilities to United States aircraft monitoring MX missile tests in the Pacific. Strong anti-American and anti-nuclear reaction soon forces Prime Minister Bob Hawke to withdraw the offer.
1 March – Uniform credit legislation is introduced in New South Wales, Victoria and Western Australia.
2 March – The ALP government of John Cain reelected in Victoria for a second consecutive term with 47 seats and over 50% of the primary vote. A tied result in Nunawading, decided in Labor's favour, is later declared void by Justice Starke.
4 March – At the request of the United States, the Federal Government cancels the annual meeting of the ANZUS Council.
20 April – The Duke of Kent officially opens the Queensland Performing Arts Complex at a gala Royal Festival Performance. The opening celebrations – which include a parade, the launching of masses of balloons, fireworks and a fly-over by RAAF aircraft – are scheduled to continue for almost a month.
26 April – Mr. Justice Lionel Murphy is committed for trial on two charges of attempting to pervert the course of justice.
30 May – At the Premiers' Conference, the Grants Commission makes cuts, especially to the Northern Territory and Queensland. Business and conservative interests praise Federal Treasurer Paul Keating as a result.
22 August – The Royal Commission on the use and effects of chemical agents on Australian personnel in Vietnam finds no link between the chemical defoliant Agent Orange and the health problems of the Vietnam War veterans.
October – Network Seven drops Neighbours after seven months on air, only for it to be continued by Network Ten.
3 October – Victorian Premier John Cain announces the resignation of Victorian Governor Sir Brian Murray over his acceptance of discounted air fares from Continental Airlines. The issue dragged on for several years, causing much embarrassment and recrimination.
12 October – Canon Arthur Malcolm becomes the first Aboriginal Bishop in Australia.
24 October – South Australian Ombudsman Mary Beasley resigns over much publicity over travel concessions for her partner Susan Mitchell. Her successor Grant Edwards resigns on the same day, subject to an inquiry, with Eugene Biganovsky thus becoming the third to hold the office within the one day.
13 November – Mr. Justice Paul Brereton introduces amendments to the Darling Harbour Bill, stating that the intransigence of the SSC had forced the New South Wales Government to exempt the controversial Sydney Monorail from normal planning controls and claiming that the casino planned for the site would spell the end to illegal gambling.
15 December – Rural discontent at soaring interest rates and falling commodity prices is symbolised by the rally in Canberra of 9,000 farmers for the court appearance of a farmer who had dumped 35 tonnes of wheat on the steps of Parliament House.
16 December – New South Wales Premier Neville Wran is charged with contempt of court by the Federal Department of Public Prosecutions in relation to remarks he had made on November 28 when the Appeal Court had ordered a new trial for Mr. Justice Lionel Murphy.
22 December – The new Victorian Governor is announced as academic and Uniting Church minister, Rev. Davis McCaughey, to be sworn in on February 18, 1986.
4 December – Australia are unable to undo a 2–0 deficit from the first leg and draw 0–0 with Scotland in the World Cup qualifying playoff at Olympic Park, failing to qualify for the 1986 FIFA World Cup.