1796 in Australia
- 16 January – Australia's first theatre opens in Sydney. Edward Young's The Revenge and the comedy The Hotel are the first works performed.
- 23 January – The distillation of spirits is prohibited.
- 5 February – Soldiers from the New South Wales Corps wreck a house belonging to millwright John Baughan.
- 10 February – Magistrate William Balmain challenges Macarthur over the house-wrecking incident.
- 29 February – Macarthur resigns as Inspector of the Public Works and is replaced by Richard Atkins.
- June – George Bass makes an unsuccessful attempt to cross the Blue Mountains. Coal is discovered near Port Stephens.
- 14 September – Governor Hunter complains to the Colonial Secretary of Macarthur’s behaviour.
- 15 September – Macarthur complains to Colonial Secretary of Hunter’s governing.
- 9 November – As Sydney grows, Hunter disbands the convict night watch. He divides Sydney into four districts responsible for their own watchmen and orders houses to be numbered.