By Hubert Walker for CoinWeek ….
The federal budget that Treasurer Scott Morrison presented to the Australian House of Representatives earlier today (Tuesday, May 3) may bring an official end to the production of five-cent coins by the Royal Australian Mint.
If this proves to be the case, the elimination of Australia’s smallest-denominated coin will most likely follow the same gradual pattern as the elimination of the one- and two-cent coins in the early 1990s. The phase-out was announced in then-Treasurer and future Labor Prime Minister Paul Keating’s August 21, 1990 Budget Speech. And while production stopped in 1990, the coins weren’t completely withdrawn from circulation until 1992.
Therefore, if such an announcement is made, expect five-cent coins to disappear from Australian pockets and purses by sometime in 2018.
In another analogue with the extinct one- and two-cent coins, the reason for the five-cent coin’s elimination is the same: inflation. In June of 2014, the Mint’s Chief Executive Officer Ross MacDiarmid announced that it cost six cents to produce one five-cent coin (though discussions about the elimination of the denomination had formally begun in 2009).
Still, other reasons for ending production of the 50-year-old coin, introduced on February 14, 1966 as Australia converted to a decimal system for its coinage and currency, are just as relevant to the impending decision if less black-and-white.
All over the world, cashless and electronic methods of payment (credit and debit cards, PayPal, Bitcoin, etc.) continue to make up a larger and larger percentage of commercial transactions.
And many Australian businesses and vending machines already refuse the coin.
“We’ve seen a halving of the demand for five-cent pieces over the past five years and our expectation is that it will just simply progress … It’s lost its utility; it will lose interest from the public,” MacDiarmid said.
Elimination of the five-cent coin will not come without its issues, however. As citizens in New Zealand (who eliminated the denomination in 2006) can attest, Australians will have to adjust to the rounding up and down of familiar prices.
The Australian Federal Budget 2016-17 was delivered a week earlier than usual due to possible calls for parliamentary elections. Details of the budget will be announced later tonight.