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Rising metal prices spell end for small tender

Tuesday 28 June 2011 - by Regulation Mutters

Australia may have to scrap its five cent coin due to rising metal prices, the country's Treasury has admitted.

The Royal Australian Mint has advised the government that the face value of the coin is less than the cost of production, and so has reportedly asked the government to consider binning it altogether as legal tender.

As the value of five cents has fallen in recent years, the coin (made of 75 per cent copper and 25 per cent nickel) has become more and more unnecessary. It is now no longer accepted for parking and phone booths.

Though it looks like the coin may go the way of one and two per cent coins, which were abolished in the early 1990s, the country's business community and charities are likely to oppose any such scrapping of the coin.

The decision rests with Bill Shorten, assistant treasurer for financial services and superannuation.

Given the rampant rise of commodity prices, the Mutterer wonders whether other countries could soon follow suit?

Could we soon see the end of the one penny piece in the UK or the lucky dime in America? (The euro of course has other more pressing existential worries).

Postscript: Curiously, the Mutterer notes that under the Currency Act 1965, if you present more than five dollars worth of five cent coins to a shopkeeper in Australia, he or she has the right to refuse your custom.

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