Lexi Webster
Australia's transition from the Australian pound to the Australian dollar, or the decimalisation of its currency, occurred on 14 February 1966. This change was implemented to simplify financial transactions, increase efficiency, and reflect how the nation saw itself. The process began in the late 1950s, with the establishment of the Decimal Currency Committee in 1959, and the introduction of the Currency Act 1963. The transition period lasted two years, during which both currencies were legal tender. The switch to decimal currency was a significant event in Australia's history, marked by educational campaigns and the creation of the character 'Dollar Bill' to help Australians adjust to the new system.
| Characteristics | Values |
|---|---|
| Date of change | 14 February 1966 |
| Old currency | Australian pound |
| New currency | Australian dollar |
| Conversion rate | £A 1 = A$2 |
| Previous division | 20 shillings of 12 pence each |
| New division | 100 cents |
| New major unit | Dollar (10 shillings) |
| New minor unit | Cent (1/100th of the dollar) |
| Design | Uniquely Australian |
| Colour | Lighter and brighter |
| Security | Complex |
| Notes | Polymer |
| Coin production | Royal Australian Mint in Canberra |
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What You'll Learn
The Australian pound to Australian dollar conversion
Australia's switch from the Australian pound to the Australian dollar was a significant event in the country's monetary history. The change occurred as part of the country's decimalisation process, which simplified financial transactions and calculations, boosting national productivity.
The Australian pound, like the British pound, was divided into 20 shillings of 12 pence each, making financial arithmetic complex and cumbersome. Recognising the economic importance of decimalisation, the Menzies government in the late 1950s initiated the process of converting Australia's currency to a new decimal system. This decision aligned with the currency systems of many of Australia's trading partners and the majority of the world.
The transition to decimal currency was overseen by the Decimal Currency Committee, appointed by Treasurer Harold Holt in February 1959. The committee's recommendations led to the enactment of the Currency Act 1963, which set 14 February 1966, as Changeover Day or C-Day. A two-year transition period followed, during which both the Australian pound and the new decimal currency were legal tender.
The new decimal currency introduced the dollar as the major currency unit, equal to ten shillings, and the cent as the minor unit, worth one-hundredth of a dollar or 1.2 pence. The new currency's design featured bold colours and uniquely Australian elements, reflecting the nation's identity. The decimalisation of the Australian currency marked a shift towards independence from Britain and provided an opportunity to create a monetary system that symbolised how the country viewed itself.
The process of transitioning from the Australian pound to the Australian dollar was a careful and deliberate one, considering both practical financial matters and the symbolic significance of the nation's currency. The change had a lasting impact on Australia's monetary system, simplifying transactions and shaping the way Australians interacted with their currency.
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The Royal Australian Mint opens in Canberra
Australia's currency system has undergone several changes over the years, with the most significant shift occurring in the mid-1960s when the country transitioned from the Australian pound to decimal currency. This change was driven by the recognition that the complex pound-shilling-pence system was cumbersome and hindered economic efficiency.
The Royal Australian Mint in Canberra played a pivotal role in this transformation. The mint was officially opened by His Royal Highness Prince Philip on 22 February 1965, a little over a year before the introduction of decimal currency in 1966, known as Changeover Day or C-Day.
The establishment of the Royal Australian Mint in Canberra was a significant development in the country's monetary history. The mint not only produced Australia's new decimal currency but also symbolised the nation's evolving sense of identity and its desire to forge a unique path distinct from Britain. The minting of Australian coins with distinct designs and security features reflected this aspiration for a currency that embodied Australia's national character.
The Royal Australian Mint has continued to be a cornerstone of Australia's currency system. Visitors to the mint can gain fascinating insights into the country's history through its rare coins and exhibits. The interactive touchscreens and videos offer a detailed look at the minting process, while the factory viewing area provides a bird's-eye perspective of Australian coin production.
The mint also showcases the National Coin Collection, featuring coins that hold special memories for many Australians, such as the first gift from the tooth fairy or the sixpence in the Christmas pudding. Beyond standard circulating coins, the mint produces commemorative coins and medals to mark significant events and honour notable figures in Australian history and culture.
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The Australian government's considerations
In 1901, following Federation, Australia's currency consisted of British coins, Australian-minted gold sovereigns, locally minted copper trade tokens, and private bank notes. The lack of a unified currency was not seen as an urgent issue, and colonial banknotes and coins continued to circulate. However, various post-Federation governments considered decimalisation from as early as 1901, but they followed Britain's lead, which opposed the idea.
In 1935, the Labor government of Joseph Lyons initiated the first major inquiry into Australia's monetary system, resulting in a recommendation for the introduction of a decimal coinage system. However, it wasn't until the late 1950s that the Menzies government recognised the economic importance of decimalisation. The complex arithmetic of financial transactions in the existing system was seen as a hindrance to national productivity.
In February 1959, the Menzies government appointed a Decimal Currency Committee to examine decimalisation, presenting its report in August 1960. The committee's recommendations led to the introduction of the Currency Act 1963, which set 14 February 1966, as Changeover Day, followed by a two-year transition period.
The change to decimal currency, or the Australian dollar, was a significant event in Australia's history. The government recognised the need for a comprehensive public education campaign to ensure a smooth transition. This included television advertisements, brochures, leaflets, games, and play money to help Australians understand the new currency and its impact on their daily lives.
Additionally, the government considered the design and security features of the new currency. The bold colours, uniquely Australian design elements, and complex precautions against forgery were all carefully planned. The new currency provided an opportunity for Australia to reflect its national identity through its notes and coins.
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Public education about the new currency
The Australian government began considering the introduction of a decimal currency in the early 20th century, but it wasn't until the late 1950s that the Menzies government recognised the economic importance of converting to a new system.
The new currency was introduced in 1966, replacing the Australian pound with the Australian dollar. The Currency Act 1963 set 'C-Day' for 14 February 1966, followed by a two-year transition period where both pounds and dollars could be used.
To familiarise the public with the new currency, the Reserve Bank of Australia (RBA) and the government ran educational campaigns. These included the creation of the cartoon character Dollar Bill, who helped Australians understand the new decimal system. During the transition period, citizens could use either currency to pay for goods and services, and any change they received would be in the new currency.
The RBA also printed new items such as cheques, travellers' cheques, bonds, and decimal currency postage stamps. The Bank ensured that an adequate supply of new coins and banknotes was distributed to each of the 5,000 bank branches across Australia before C-Day.
The new currency's design:
The decimal currency's design reflected Australia's distinctive identity and history. The coins featured Australian wildlife, with the 1, 2, 5, 10, 20, and 50 cent coins depicting the country's unique fauna and an image of Queen Elizabeth II on the obverse side. The banknotes were designed with bold colours and uniquely Australian elements, with the $1, $2, $10, and $20 notes having exact equivalents in the former pound notes.
The overall look and feel of the new currency were radically different from what Australians were used to, but the decimal denominations matched their pound/shilling/pence counterparts. For example, the $1 bill replaced the 10-shilling note.
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The Australian dollar's exchange rate
Australia's currency history is a fascinating one, with the country eventually transitioning from the Australian pound to the Australian dollar in the mid-1960s. This shift to decimal currency brought about a new era of financial efficiency and national identity.
The Transition to the Australian Dollar
The Australian government had considered decimalisation since the early 20th century, but it was not until the Menzies government in the late 1950s that serious steps were taken. The complex arithmetic of the Australian pound, divided into 20 shillings of 12 pence each, was seen as a hindrance to economic transactions and national productivity.
In February 1959, Treasurer Harold Holt established the Decimal Currency Committee to explore the advantages of decimalisation. Following three years of deliberation, the committee's recommendations led to the Currency Act 1963. This pivotal legislation designated 14 February 1966 as Changeover Day (C-Day), marking the introduction of the new decimal currency.
The major currency unit was named the dollar, equal to ten shillings, while the minor unit, the cent, was worth one hundredth of the dollar, or 1.2 pence. The Royal Australian Mint in Canberra, opened by Prince Philip in 1965, began producing these new coins.
The new currency's design reflected Australia's unique identity, featuring bold colours and security features to prevent forgery. This transition period, lasting until 1968, witnessed the coexistence of both the old and new currencies as legal tender.
The Australian dollar, with the currency code AUD and the symbol $, has its exchange rate calculated and published daily by the Reserve Bank of Australia (RBA), excluding public and bank holidays in New South Wales. The RBA also computes the Trade Weighted Index (TWI), which is recalibrated annually based on the composition of Australia's merchandise goods and services trade from the previous fiscal year.
The AUD to USD exchange rate is particularly popular, given the widespread use of these currencies in international trade and commerce. Various factors influence the exchange rate, including interest rates, economic performance, and geopolitical events. Over time, the Australian dollar's exchange rate has fluctuated, reflecting the dynamic nature of the global economy and the unique factors impacting Australia's economic landscape.
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Frequently asked questions
Australia changed its currency on 14 February 1966, when the Australian pound was replaced by the Australian dollar.
The conversion rate was set at £A 1 equalling A$2.
The Australian dollar is subdivided into 100 cents.
