Mint says it still makes sense to make the five cent

Michael Weaver 21 August 2020 15
Five-cent pieces in a hand

Money in hand – people are hanging on to their low denomination coins such as the five-cent piece. Photo: Michelle Kroll.

You can’t use them in parking machines or many vending machines these days, but the future of the five-cent coin is actually in good hands as people hoard low denomination coins during tough economic times, according to the Royal Australian Mint.

And despite moves towards a cashless society, and people being urged to use cards instead of coins during the COVID-19 pandemic, Mint CEO Ross MacDiarmid said people are holding on to their coins instead of spending them which is increasing demand.

“We’ve actually seen an upturn in demand for the five-cent piece during this financial year,” Mr MacDiarmid told Region Media.

“The reason, we think, is that in tough economic times, people tend to revert back to using something they’re familiar with, which in this case is cash. People are receiving more change and they tend to be putting those coins away, so there’s ongoing demand from the business community and retailers for five and 10-cent pieces in particular,” he said.

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Mr MacDiarmid said commentary from some economists this week that the Mint in Deakin is phasing out the humble five-cent coin is unfounded.

The biggest threat to the future of the five-cent piece is actually the cost of nickel, which means the cost of producing a single five-cent coin is around four to six cents.

“If we had a coin that cost significantly more to manufacture than its face value, then clearly that would bring into question its ongoing viability, but that doesn’t apply to any of the coins we produce,” he said.

“The cost varies from 4.5 cents up to six cents depending on the price of nickel.

“The demand for five-cent pieces has been progressively falling for the past five to eight years quite significantly, but our recommendation to the government has always been that we really don’t need to make any decisions because, over time, the coin will progressively not be used.

“The point that needs to be made is that if demand for a coin like the one and two-cent piece actually diminishes, then it basically stops being produced. The one and the two-cent piece has never been demonetised, it still theoretically can be used but we just don’t use it anymore and it’s stopped being produced,” he said.

Recent research conducted by the Mint found people were concerned that coronavirus and other viruses could be spread via coins, but people had responded by washing their hands more regularly.

“We also contacted the banks and their advice to us was that they would still be making orders for all of the lower denomination coins, which suggests to us that people are receiving their change from a transaction but they are putting these coins away.

“I’d expect to see those coins come back into circulation once we get back to a normal environment, and subsequently, I’d expect the demand for these coins to also decline once again.”

Mr MacDiarmid said there won’t be any recommendation to phase out the five-cent coin in the short term.

“If we produce 15 million five-cent coins, the saving from not having that coin in the marketplace is so insignificant that it’s just not worth the exercise of phasing it out.”

In 2014, around 76 million five-cent coins were minted, while in 2018 there were 25.1 million coins made. The partial figure for 2019 is 17.11 million (the final figure will be announced in the Mint’s 2019-2020 annual report).

Of far greater demand has been for the Mint’s collectable and bullion coins by numismatists.

“Demand here has been way beyond anything we’d expected because people are looking for value and something to hang on to. We’ve seen the level of demand increase by anywhere between 10 and 15 per cent, especially for gold and silver coins,” Mr MacDiarmid said.

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15 Responses to Mint says it still makes sense to make the five cent
Chris Ellis Chris Ellis 2:33 pm 24 Aug 20

I put the 5 cents coins in a jar. When it’s full I donate it to charity.

Wayne Morris Wayne Morris 10:16 am 24 Aug 20

Completely renew/review our currency structure. Current $10 equals New $1. Current 10 cent equals 1 New cent. New Notes and coins would have real value.

Trish Lingard-Wyss Trish Lingard-Wyss 7:33 am 24 Aug 20

Some banks have coin deposit machines. Just feed them in and deposit it back into your account or take a bit of paper to the counter and get cash.

Peter Fogwell Peter Fogwell 7:02 am 24 Aug 20

Good for scratchies.

Jack Land Roberts Jack Land Roberts 6:34 pm 23 Aug 20

Still makes cents 😂

HiddenDragon HiddenDragon 6:32 pm 23 Aug 20

The banks (and their employees and shareholders) should be grateful for the virus driving people to look more favourably on cash (larger notes, reportedly, not just lower value coins) – the trend to a cashless society, which the banks generally seem to encourage, will make it so much easier for the likes of Apple to outflank them and steal a lot of their business.

Guy Noble Guy Noble 2:38 pm 23 Aug 20

Woolies and coles need to put change machines in the supermarkets, it doesnt need to hand out dollars hand out a credit for the shop. Some people have 000s in coins laying around at home

    John Hamilton John Hamilton 2:56 pm 23 Aug 20

    Most banks have change machines for you to use. It isn't woolies and coles job to collect your coins unless you're using them to pay for a product

    John Hamilton John Hamilton 4:59 pm 23 Aug 20

    If coles and woolies want to do it, they can. I just don't see why one would think coles and woolies need to do it when banks already do it

    Guy Noble Guy Noble 5:00 pm 23 Aug 20

    if i had a choice of going to a supermarket with 50 bux in coins, cashing it in for credit and then doing my shopping or taking my coins to a bank, prob paying a fee to deposit them then wqalknig over to the supermarket and using my card and paying a fee i know my answer lol

    John Hamilton John Hamilton 5:02 pm 23 Aug 20

    Unsure about your bank but mine doesn't charge to count coins. Nor do i have to deposit the money into my account (although I always choose to do so)

    Guy Noble Guy Noble 5:03 pm 23 Aug 20

    so you just pay a fee when you use it

    Guy Noble Guy Noble 5:17 pm 23 Aug 20

    Just about every major supermarket over there had a coin machine and also bottle recyclying machines. None handed out cash they handed out credit to the shop. Cant see why ANYONE could object to this, or you just being difficult?

    Guy Noble Guy Noble 5:29 pm 23 Aug 20

    How good would it be if every petrol bowser had a coin machine on the end of it,,,, while you were filling up you could empty all your coins from your console.... Unless you love the bank and love paying fees why would you not when them around town

    Shane Westmore Shane Westmore 7:28 pm 23 Aug 20

    Coles & Woolies can refuse a certain number of coins under consumer law, in fact any retailer can... of course most don’t but for silver coins it’s no more than $5 total... so legally you have to go to a bank... or just go to a bunch of retailers & buy lots of things under $5

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