Australia seeks to get rid of five cent coin
Steve Chiotakis: In Australia, the government wants to get rid of the country’s five cent coin — because the cost of making the coin now cost more than five cents. In fact, the government says in an increasingly cashless economy, small value coins are no longer relevant. Stuart Cohen reports that Sydney has already eliminated pennies.
Stuart Cohen: With smaller coins no longer used in Australia, at this busy supermarket in Sydney, every purchase made with cash is rounded up or down to the nearest five-cent increment.
In other words, you win some, you lose some.
Now the proposal from Australia’s Royal Mint would mean transactions would be rounded to the nearest 10 cents.
Last time around the government left it to businesses to decide whether to round prices up or down.
But Ingrid Just of Australia’s leading consumer group, Choice, says this time that approach could hurt shoppers.
Ingrid Just: Look, there is potential for consumers to be on the losing end should the five cent coin be abolished. And that really depends upon the approach that retailers and service providers apply, whether they round up or whether they round down. I think you do tend to see historically that businesses will probably to round up.
Don’t expect the same thing to happen in the U.S. any time soon.
As recently as 2006, some members of Congress have proposed eliminating the penny.
But consumer advocates say that will have the effect of pushing retail prices upward, and public opinion polls still show an overwhelming number of Americans want to keep the coin.
In Sydney, I’m Stuart Cohen for Marketplace.
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