SYDNEY, Australia -- Australia's government is considering doing away with its five-cent coin as it grapples with high metal prices and inflation. While the vending industry has all but eliminated the nation's smallest denomination coin in its machines, many retailers fear that removing it from circulation could result in consumer backlash that could hurt their businesses.
The Royal Australian Mint has said the cost of producing the five-cent coin far outstrips its face value. And the nation's Assistant Treasurer is reportedly considering the Mint's advice to eliminate it, according to the Sydney Sun-Herald.
Last month, the Australian Retailers Association's executive director observed that the five-cent coin is less relevant in today's economy. But he also warned that retailers would bear most of the brunt of the consumer backlash if it is no longer produced, since consumers might regard the decision to round up a price as they shouldn't have to bear.
The president of Australia's United Retailers Federation was reported as saying last month that changes in prices associated with eliminating the five-cent piece would spark a "crisis in confidence" at a time when Australia's biggest problem is regaining confidence in the retail sector. He expressed his concern that consumers will feel "they're getting stung down to their last five cents."
Australian consumer advocacy group Choice said the majority of consumers consider the small coin a nuisance and would welcome its elimination. But it is also asking the government to impose guidelines for retailers to round down rather than up if the coin is scrapped, saying every five cents adds to the soaring cost of living, the Sun-Herald reported.
While Australian law prohibits businesses from refusing to accept any form of currency for payment, many retailers have taken it upon themselves to remove the five-cent piece from the equation, according to the newspaper.
Vending and parking machines and pay telephones are reportedly among the automated retail businesses that have stopped accepting the coins. The Australian Vending Association's president confirmed the trend to Australia's ABC news network earlier this year, saying that the five-cent coin's days in vending machines were numbered, and that the dollar bill validator and credit card readers were the wave of the future.