Lexi Webster
Money is what we use to pay for things we need and want. In Australia, money comes in coins and notes. The Royal Australian Mint makes the coins, and the Reserve Bank of Australia prints the notes. Australian coins have a picture of the reigning monarch on one side, which is currently King Charles III, and a special Australian design on the other side. The Australian dollar was introduced in 1966, and Australia was the first country to print notes on polymer plastic instead of paper.
| Characteristics | Values |
|---|---|
| Currency | Australian Dollar |
| Currency Symbol | $ |
| Currency Introduced | 14 February 1966 |
| Currency Replaced | Australian Pound |
| Conversion Rate | 2 Dollars to the Pound |
| Subdivisions | 100 Cents |
| Current Notes | $5, $10, $20, $50, $100 |
| Current Coins | $1, $2, 5 cents, 10 cents, 20 cents, 50 cents |
| Coins Features | Reigning Monarch, Australian Flora or Fauna |
| Notes Features | Waterproof, Made of Polymer, Hard to Counterfeit |
| Coins Produced At | Royal Australian Mint in Canberra |
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What You'll Learn
Australian currency history
Australia's currency history dates back to before the country was officially colonised. Early Aboriginal Australian communities traded using items like tools, food, ochre, shells, raw materials, and stories. There is no evidence of currency usage during this time.
After colonisation in 1788, New South Wales became a British colony and was provided with English currency for circulation. However, the supply was insufficient, leading to the use of alternative forms of exchange.
In 1899, the Perth Mint opened, allowing gold miners to exchange raw gold for gold coins. Following federation in 1901, the currency in the Australian colonies consisted of British silver and copper coins, Australian-minted gold sovereigns, locally minted copper trade tokens, and private bank notes.
In 1910, the federal government, led by Prime Minister Andrew Fisher, passed the Australian Notes Act, creating a national currency, the Australian pound, which was at par with the British pound. This was Australia's first national currency.
In 1929, during the Great Depression, Australia left the gold standard, resulting in a devaluation of its currency relative to sterling. In 1931, the Australian currency was devalued again by 25%, making one pound five shillings Australian equal to one pound sterling.
In 1966, the Australian pound was decimalised, and the Australian dollar was introduced as the new currency. The conversion rate was two dollars for every pound. The $1 coin was introduced in 1984, replacing the $1 note, and the $2 coin replaced the $2 note in 1988.
Today, Australian currency continues to evolve, with new technologies being implemented to enhance security and convenience. The Australian dollar is now the official currency and legal tender in Australia and its external territories, as well as in the independent sovereign Pacific Island states of Kiribati, Nauru, and Tuvalu.
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How coins are made
Australia's coins are made at the Royal Australian Mint in Canberra. The process starts with an initial design brief, where product developers, coin designers, and engineers work together to create a design that will look good on a coin. Once the design is approved, a three-dimensional model is sculpted using either traditional plaster modelling tools or 3D modelling software. The coin designer can spend many hours refining the model to ensure the final product will be of the highest quality.
After the model is finalised, it is sent for the cutting of a master tool, and the manufacturing process begins. The coin design is cut directly into tool steel using a computer-controlled engraving machine, creating what is known as a reduction punch. This process can take up to 24 hours. The reduction punch contains a raised or relief impression of the complete coin design.
Sheets of metal are then cut into coin-shaped pieces, known as blanks. These blanks will become coins once they are struck by dies. Blanks are usually round, except for the blank for the 12-sided 50-cent coin. The blanks are rolled through a specially shaped groove, resulting in a raised edge that assists in the coining operation by partially forming the rim. Blanks for proof coins undergo additional processes, including annealing (controlled heating in a furnace) and pickling (cleaning in a bath of hot acid). Burnishing, or spinning in a large drum with tiny ball bearings, smooths any surface blemishes.
The Mint's Fitters and Machinists install the dies in the coin presses. Proof coins are made in presses that strike with 180-360 tonnes of pressure, with each blank struck 4-6 times. Each proof die can strike about 250 coins before it needs to be replaced. Uncirculated coins are inspected by staff who monitor the production conveyor belt as coins leave the press, removing any that don't meet the standard. Proof coins are individually inspected using eyeglasses and magnifying lamps, with any imperfections resulting in the coin being placed in a reject pile to be melted down.
Finally, the circulating coins travel along a conveyor system, where they are counted and placed into small bags, which are then weighed to ensure they contain the correct number of coins. These small bags are then counted into larger bags. The uncirculated and proof coins are then individually packaged and delivered to the Royal Australian Mint's onsite shop, eShop, or distributed to dealers.
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Recognising different coins
The smallest coin is the 5-cent coin, which is made of copper and nickel, is circular, and has a milled edge. The reverse side of the coin features an image of an echidna. The 10-cent coin is also made of copper and nickel, is circular, and has a milled edge. Its reverse side features an image of a lyrebird. The 20-cent coin is made of the same materials and has the same shape and edge as the 5 and 10-cent coins, but its reverse side features an image of a platypus.
The 50-cent coin used to be made of silver and copper, but now it is made of copper and nickel like the other silver coins. Its reverse side features the Australian Coat of Arms. The $1 coin was introduced in 1984 to replace the one-dollar note. Its reverse side features five kangaroos, and it is made from copper, aluminium, and nickel. The $2 coin was introduced in 1988 to replace the two-dollar note. Its reverse side features an Australian Aboriginal elder, the Southern Cross, and Australian flora. It is made from the same materials as the $1 coin.
There are many games and activities that can help with recognising coins, such as sorting coins into piggy banks and using worksheets and posters to learn about the different coins and their values.
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The use of paper and polymer
Australia's banknotes are made of a special type of plastic called polymer, which has a waxy feel. Before this, Australian banknotes were made from paper, like the banknotes of the US and several other countries, which are made of cotton fiber paper.
Polymer banknotes are totally waterproof, hard to copy, and relatively cleaner because they are resistant to moisture and dirt. Polymer notes also last two to three times longer than paper notes. This means that they do not need to be replaced as often, which saves money.
The first Australian polymer banknote was introduced in 1988. Australia was the first country to produce polymer banknotes, made of polypropylene polymer, which were produced by Note Printing Australia.
Before Australia's currency was made of polymer, it was made of paper. Paper currency is often made of cotton fiber paper. Paper notes are not as durable as polymer notes and are more likely to get dirty or damaged. They also need to be replaced more often, which can be costly for a country.
In their second year at school, Australian children begin to learn about Australian coins and notes, including how to recognise, describe, and order the different coins and notes according to their value.
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Australian currency in other countries
The Australian dollar is the official currency of Australia. It is also the official currency of some other countries and territories. These include the external territories of Christmas Island, Cocos Islands, and Norfolk Island. The dollar is also the official currency of three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu.
Nauru has never had its own currency. Tuvalu and Kiribati also had their own dollars, which were equal in value to the Australian dollar. However, these countries no longer produce their own coins and have never made their own banknotes. So, the Australian dollar is the main currency used in these countries.
The Australian dollar is also one of the most traded currencies in the world. It is popular with currency traders because of Australia's high interest rates and the stability of its economy and government. The Australian dollar is also known as a 'commodity currency' because its value changes based on the demand for Australia's natural resources, like minerals and agricultural products.
In 1988, Australia became the first country in the world to use polymer plastic notes, instead of paper ones. These notes are harder to copy and last longer.
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Frequently asked questions
Money is what we use to pay for things we need and want.
Australian money comes in notes and coins. The notes are made of a special type of plastic called polymer, and the coins are made of metals like copper, aluminium and nickel. Each coin has a different design and size so you can tell them apart.
The Royal Australian Mint makes the coins, and the Reserve Bank of Australia prints the notes.
One side of the coins has a picture of the monarch or 'heads' of the country, which is currently King Charles III. The other side has a picture of something Australian, like an animal or plant. The notes also have pictures of Australian people and things.
Australian money is used in Australia, and also in some other countries like Kiribati, Nauru and Tuvalu.
