From the Archives, 1992: Inflation ends the copper coin in Australia
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By Michael Magazanik
First published in The Age on February 1, 1992
Inflation cashiers another copper age
After 20 years of wearing holes in pockets, clogging drains and filling piggy banks, one and two-cent coins will be withdrawn from circulation, starting today.
There is a lot of the copper in the system. Since 1966, 53 billion coins have been produced, weighing 20,500 tonnes, with a face value of $71 million.
The Royal Australian Mint stopped making the coins in 1990 because they were a drain on the mint’s funds and held little value.
Inflation has rendered five and 10-cent coins less valuable today than were the one and two-cent coins when decimal currency was introduced in 1966. The copper in the one and two-cent coins is worth more than their face value.
The chairman of the Prices Surveillance Authority, Professor Allan Fels, said the end of copper would not devastate the mixed lolly business, increase inflation or spell the end of the $9.99 bargain.
“Prices should still be set in one and two-cent units, and rounding up and down only applies to cash payments of total bills,” Professor Fels said yesterday.
Total prices would be rounded up or down to the nearest five cents. Individual items, such as two cent chocolate Mates, will retain their prices. Coles, Woolworths and Target have announced that they will round all totals down.
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The authority has provided a telephone line for inquiries and has promised to keep a close eye on traders to prevent profiteering.
Professor Fels expects complaints. “I think there are some passions aroused by these small amounts of money. It’s a fact of life that some people get very emotional about one and two-cent pieces.”
He said some people would make extra purchases to avoid totals being rounded up. “There will be a few people who make that economic decision that it is worth spending 60 cents on a Freddo Frog in order to save two cents.”
The coins, which will remain legal tender, will be collected and returned to the mint to be melted down and recycled into copper products.
Professor Fels advises anyone thinking of hoarding the coins as an investment not to bother. “So many people hoard these things that they will never be of any scarcity value.”
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