Your bigger problem with peak season is not so much the money, but actually finding somewhere to stay. This is a great time to be in Australia, but the entire country is on holiday and most of them are at the beach, and everything is booked out. So, to the extent that is still possible, you really must plan, and book, this time of year.
A few things:
- Melbourne will be quite dead this time of year, but will pick up in mid-January as the Australian Open Tennis starts. This will also make accommodation hard to find from this time. But Melbourne is a great city and well worth a few days. The Great Ocean Road is lovely, but, again, will be packed this time of year.
- If you're into cricket Australia is playing the West Indies in Melbourne when you land, but be quick, because the way the WIndies are playing, it will probably be over on day 3, which is the day you arrive.
- Sydney has possible the world's finest NYE fireworks and it's well worth doing whatever you can to see them. You can join 400,000 people cramming the harbour shore, and, as noted above, have to stake your spot very early. Or, if Money really is not a problem, book an expensive place on a harbour cruise, the various events at the Opera House, or for $200 a spot on a ferry.
- But accommodation will be very hard to find, and anything near the harbour will be super expensive and demand minimum stays of 3-7 nights. Again, if money is no problem, do it. If not, maybe stay a little out of town and catch a train. If you were to do one big splurge on this trip, an expensive Sydney hotel, and NYE party would be well worth it for the once in a lifetime experience.
- Sydney this time of year is beaches, parks, all free and all wonderful. Darling Harbour, the Manly Ferry, Watsons Bay Ferry, bus or drive to Palm Beach (Summer Bay). Blue Mountains day trip is always a good idea. Kiama is lovely, and so to the beaches nearby such as Gerringong and Seven Mile, and especially Jervis Bay.
- Heading up the coast to Queensland is normally a good idea, and places like Byron, Nambucca, Yamba etc are lovely, but again, will all be booked out. Finding anywhere to stay will be very hard. Maybe fly to Brisbane, stay in the city or nearby, and do day trips? But if you can find places to stay, go for it.
- Cairns and the Whitsundays however should be easier as it is not peak season as this time of year as it is very hot, very humid and very wet. It's still worth it as the reef and rainforest are stunning, but just be prepared for the weather.
- Same with Uluru. A magnificent part of Australia, but it will be extremely hot. The trick is to go out at dawn and dusk (which are the best viewing anyway) then spend the day by the pool or in the air conditioned accommodation.
- Tasmania may be worth a look. Fabulous rainforest, old towns, beaches, and not quite as in demand.