History of Australian currency
From rum to polymer: Australia's currency evolution.
Quick Facts
- Decimalisation date
- 14 February 1966
Facts from the source article.
Early Australian experience
A significant British oversight was the failure to provide adequate coinage for the new colony. However, these dollars gradually left the colony as they were used to pay for goods brought by visiting ships. Due to the shortage of money, the real means of exchange during the first 25 years of settlement was rum, access to which was controlled by the officers of the New South Wales Corps. One holey dollar was worth five shillings, and one dump was worth one shilling and three pence. The objective was to keep the coins in New South Wales, as they would be valueless elsewhere. In 1817, the Bank of New South Wales was established, issuing private bank notes denominated in pounds, which were widely used though not compulsory as legal tender.
National currency
The act empowered the Treasurer to issue silver, bronze and nickel coins. The act prohibited state notes and gave the Commonwealth Treasury full control over note issue. New designs for Australia's first federal government-issued banknotes commenced in 1913. This act was repealed by the Commonwealth Bank Act 1945, which formally prohibited private currencies. In 1920, the Commonwealth Bank Act transferred note issuing authority from the Treasury to the Commonwealth Bank. In 1960, responsibility for note printing passed to the Reserve Bank of Australia, which has produced polymer banknotes since 1988.
Decimalisation
In July 1961, the government confirmed support for decimal currency but delayed final decisions. On 14 February 1966, the Australian pound was replaced by the Australian dollar at a conversion rate of £A 1 equalling A$2. The dollar comprises one hundred cents. Under this rate, 10 shillings became A$1, and 1 shilling became 10 cents. The conversion was problematic for the pre-decimal penny since the shilling was divided into twelve pence. Amounts less than a shilling were converted according to a specific table.
Australian dollar
Australia once tied its dollar to the British pound as part of the sterling area, with A$1 worth 8 UK shillings, or A$2.50 to UK£1. That link broke in 1967 when Britain devalued its currency against the US dollar and Australia chose not to follow. By 1971, the Australian dollar was pegged to the US dollar at A$1 equalling US$1.12. On 12 December 1983, the newly elected Labor government under Bob Hawke, with Paul Keating as Treasurer, floated the Australian dollar. On 27 September 2012, the Reserve Bank of Australia began a project to upgrade banknotes with new security features and Braille dots for the visually impaired. The first upgraded note, the $5 denomination, entered circulation on 1 September 2016, with other denominations following in later years.
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