Cashless fury as Royal Australian Mint refuses to answer key money question
Barefoot Investor author Scott Pape had important questions about the cost of our currency. (Source: AAP/Getty)
The finance expert behind Barefoot Investor has hit out at the Royal Australian Mint for not revealing how much it costs to produce coins. Australia’s march toward a cashless society prompted author Scott Pape to try and use only physical currency for a week.
But he ended up facing a wall Yahoo Finance also hit while trying to find out how much the Canberra-based institution spends on making coins. Seems like a fair question considering even then-Mint chief executive Leigh Gordon said it cost more than 12 cents to make each 5-cent coin in 2022.
And metal costs have since risen.
Pape is a “huge fan of cash” and has backed its “cost to taxpayers to keep it in circulation”, but argued a financial transparency around its production was essential for its survival.
“Look, I get why they don’t want people asking pesky questions about the cost of coins. After all, the Mint is basically the Blockbuster Video of the Australian Government,” he said in a recent column.
“The result is that not only is the Mint producing way fewer notes and coins, it’s flowed on to their bag boys, Armaguard, who are broke.”
He contacted the Mint several times but after getting stonewalled, he eventually contacted its superior, Assistant Treasurer Andrew Leigh.
“Scott, I’m sorry the Mint wasn’t able to get you the figures you were after,” Leigh responded.
“As you’d appreciate, the Mint makes the call themselves on issues like disclosing costs.”
Do you have a money story? Email stew.perrie@yahooinc.com
But Pape called for a rethink on this policy, especially in the cashless era where a lot of attention is being paid to physical money.
Cash use is in decline.
The RBA’s 2022 Consumer Payments Survey found that just 13 per cent of transactions were made using cash, dominated by electronic payments (87 per cent).
In 2010, the number of cash transactions hovered around 60 per cent, which illustrates how far digital payments have come in a relatively short time.
Pape said the government owed it to Australians to remain transparent around the cost of producing cash.
“I don’t appreciate highly paid bureaucrats deciding they’re too important to answer to the people who pay their salaries. This ain’t North Korea,” he wrote.
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Pape pointed to cautionary tale Sweden — one of the most cashless countries in the world.
It has now urged citizens to have backup cash in the event of a crisis, emergency or even war.
“If the Vikings are worried about a digital apocalypse, maybe it’s time to stash a few pineapples under the mattress,” Pape said.
According to the latest figures released by Note Printing Australia in 2021-22, it cost the government $74 million to produce 234 million banknotes.
This was a combination of $50 and $100 notes, suggesting that each one cost roughly 32 cents each.
However, coins are a different story as they are minted with metal rather than the polymer material for notes.
The Mint revealed in 2022 that it costs around 12 cents to make every single 5 cent piece.
Cash use is in decline, but many Australians still want access to physical currency. · Jenny Dettrick via Getty Images
Last year, there were 10 million 5 cent coins minted, which is a sharp decline from the 49 million minted in 2022 and 36.7 million in 2021.
The ABC reported that it had been far more economical to produce $1 and $2 coins as 20 cent and 50 coins were affected by fluctuating nickel prices.
It only costs about 8 cents each to produce a gold coin, compared to the 14 to 28 cents for the higher denomination silver ones.
Treasurer Jim Chalmers said the production of coins was “under constant review” in November when questioned about the use and value of 5c coins.
A poll of more than 2,300 Yahoo Finance readers found 67 per cent felt they were “still useful”, while 28 per cent thought they could be scrapped.
The Assistant Treasurer told Yahoo Finance the government had “no intention of abolishing the 5 cent coin”.
A Mint spokesperson also said there were currently “no plans” to scrap the 5-cent coin but that the decision would ultimately rest with the government.
“There are currently no plans to end the production of any coin denominations, nor remove them from circulation,” the Mint spokesperson told Yahoo Finance.
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