You know those five cent coins jangling around in your pocket? Prime Minister Malcolm Turnbull is open to the idea of getting rid of them entirely.
At a meeting with the Tasmanian Liberals last Friday, Turnbull was asked by a local Tasmanian radio station if the coin should go, reports news.com.au.
“It’s a good question. I’ll be very interested to follow the local debate on that,” he said in response.
“You don’t see them a lot anymore, do you actually? It’s a fair point.”
The discussion was prompted by the issue being put on the agenda of a meeting of the Tasmanian Liberals. The Southern Young Liberals say the coin is becoming “irrelevant”, according to SBS.
Debate around the necessity of Australia’s smallest coin denomination has been ongoing since February this year, where Royal Australian Mint chief executive Ross MacDiarmid said it was “dying a natural death”.
“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 told The ABC.
However, in February this year, reporters asked Treasurer Scott Morrison why the country had not abolished the five cent coin yet.
“If you can get as many people as in this room again who are interested in that topic, I’ll answer your question,” Morrison said.
The coin now costs six cents to make, which has prompted many retail experts to question its longevity.
Russell Zimmerman, chief executive of the Australian Retail Association told SmartCompany that he “lives expectantly waiting for it to happen”.
“It costs more than it’s worth to produce, so this has been on the radar for quite some time,” Zimmerman says.
He believes there will be winners and losers when the coin is removed, acknowledging the difficulties for retailers when it comes to rounding.
“Back when we got rid of the one and two cent pieces, I talked to a major Australian manufacturer about a product being sold at $59.95 compared to $59.99,” he says.
“They were losing four cents each product sold, and with thousands of products sold that makes a huge difference to a business’ bottom line.”
Zimmerman admits this will have less impact on smaller retailers, saying rounding up smaller items “isn’t going to make or break the bank”.
Retail expert at Queensland University of Technology Gary Mortimer believes that the death of the five cent piece is largely due to the rise in electronic payment.
“I think hard currency had a position in our wallets in the 70s and 80s, and today we see that hard currency is really becoming scarce when it comes to shoppers,” Mortimer told SmartCompany.
“This is simply a result of greater use of credit cards and services like “tap and go”. You see it at your local café and even at the farmers market. The more facilities we see with tap and go, the less cash.”
Due to this, Mortimer thinks we won’t see a “massive impact” with the removal of the coin, and thinks that there are no arguments for keeping the coin.
“In the western retail landscape, there would be few places left that still accept only cash,” he says.
“I don’t think too many retailers should be concerned with the impact of removing the five cent piece.”
The Royal Australian Mint has informed SmartCompany there are “no plans to discontinue the production of this coin”.