April 07, 2016

Horse 2096 - No Quarter Given At Close Quarters

For the first time Australia will get its own 25 cent coin, but you’ll probably have a better chance of finding one in a collection than in your change at the local corner shop.

The Royal Australian Mint will produce more than one million “quarters” in an exclusive one-off release and although they will be legal tender, the unique gold coins are unlikely to end up in circulation as general currency.
- Daily Telegraph, 27th April, 2016.

Owing to the fact that the United States introduced decimal currency at a time when most of the world was still using fractional currency, the US Quarter is as far as I can tell, the only 25c coin in circulation anywhere in the modern world. Britain has from time to time issued Crown sized coins which are denominated at 25 pence but they never circulate and Austria did have a 25c coin but that was more than a decade and a half ago, before the invention of the Euro.

These new 25 coins, which have an effective markup of just over 1700% (assuming that the Daily Telegraph which you need to purchase in order to get them is worthless), have a chance of being circulated which is so close to zero that it may as well be zero but in principle it is if nothing else, a good idea to test the public's attitude towards currency reform.

Let's be honest, the coins which currently circulate are not really fit for purpose anymore. The 5c, 10c and 20c coins have their basis in the British Florin (two shillings) of 1849 and that planchet size is still in use as our current 20c coin. If we assume that the average rate of inflation since then has been running at 4% then that works out to be the equivalent buying power of $139.82. That sounds idiotic until you realise that Victorian Britain had coins all the way down to fractions of farthings; so a two shilling coin would have been something which would almost never have even been seen by the majority of the population. At the time of the introduction of decimal currency in 1966, that calculation puts the 20c coin at the equivalent buying power of $1.40 and if that sounds stupid, just think of how idiotic it would be to tell the people of 1966 that the Daily Telegraph now costs 15 shillings.
As I see it, the 5c, 10c and 20c coins in their current form out outlived their usefulness and worn out their welcome. Usually I'd be calling for the abolition of just the 5c coin and maybe the 10c coin but I have seen the light. We should dump all of the cupronickel coins currently in circulation, that is the 5, 10, 20 and 50 cent coins, and introduce the Quarter to replace the whole cursed lot.

On my recent trip to the United States, I was convinced of the usefulness of the quarter because of the utter idiocy that is the persistence of the penny, nickel and dime. Pennies are stupid and should have been gotten rid of years ago. Nickels are an annoyance. Dimes are too small and are often forgotten. Quarters though, are the principal coin in circulation and provided you can wrap your head around them instead of 20c coins, they are a good thing.
If we just did away with all of the cupronickel coins in Australia, then the only things that you'd need to worry about would be quarters. We already have no trouble with rounding up or down when it comes to handling currency and to be fair, in a world where EFTPOS is commonplace nobody even worries about exact change when computers lovingly whizz numbers beneath our feet and above our heads through the internet at the speed of light.

The United States made the mistake of introducing the dollar coin and running it along side the dollar note. The general public haven't really taken a shine to the coin because the dollar note is more acceptable to vending machines but Australia which already replaced the dollar note with the coin and ditched the 1c and 2c coins, has already learnt a valuable lesson. It is the government who controls the issue of the currency and if the government wanted to impose currency reform, then they could just do it. Although the public might whinge a little bit, in six months' time it will be so much of a non-issue that they won't care. It isn't even a case of like it or lump it, it's just lump it.

I've seen restaurant menus that already ignore 5c coins and quote prices to only a single decimal place. In due time, even 10c coins will be mostly pointless and so I think that the jump straight to quarters would be like future proofing the system. A price of $¾ might look odd to us now but given enough time it would be completely normal. New Zealand has already done this and the net effect on inflation (if that's the biggest worry about this issue) was undetectable. If there were any ill effects, they didn't show up in the official inflation, unemployment or any other official figures. On a far larger scale, most of Europe changed from their old currencies to the Euro and already some countries have got rid of the 1 and 2 eurocent coins.
If all of this is a bridge too far then can we just please please please consign the 5c coin to the scrapheap already, make the rest of the coins smaller and introduce a $5 coin in place of the note? I really hate that I'm currently carrying $2.85 in cupronickel coins, which had their planchet sizes fixed in the century before last and weigh exactly the same as twenty-eight and a half shillings because that's what they are. Obviously we'd need the new Quarter to be some manageable size; I suggest borrowing the blanks for the New Zealand 50c coin.

See a penny, pick it up and all the day you'll have good luck? No! All the day you won't have good luck because you've already suffered the misfortune of picking up a coin which has failed at the only purpose for which it was designed and that is to facilitate commerce. Our 5c, 10c and 20c coins are already an inconvenience, the 50c coin is a big metal nonsense and we'd all be better off if we were rid of them.

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