Australian Currency (Money)

Australia's money is dollars and cents.
There are coins and notes.
The notes are made of plastic.
They are different colours.
Long ago Australian money was different.

Currency is the term used to describe the coins and notes that are used in a country to be used in exchange for goods or services.

In the earliest days of Australian settlement there was no proper currency.  

In 1788 the First Fleet arrived in New South Wales from England to establish a new colony. There were eleven ships and 1,487 people, including 759 convicts. English jails were overcrowded and so Australia was a convenient dumping ground for convicts. The colony was expected to become self sufficient. The Fleet brought enough provisions to last the colony for two years, during which it was expected that the convicts would plant and harvest crops. No currency was supplied for the colony, and the only money was what the passengers happened to have with them. The officers were to be paid with food and goods from the company store, and the free settlers who accompanied the Fleet would have little need of money. However, no one had much farming experience, the climate in the new land was harsh, the soils unfamiliar, and the first crops failed. Trading ships from other places started to visit the colony, bringing clothing, boots, butter, tea and rum, but the colonists had no money to buy any goods.

Governor Phillip requested money to be sent from England, and in 1790 a ship brought about 4500 Spanish dollars for him to use for the colony. At this time, many countries used to cut Spanish coins into pieces to use as money. The coins were generally cut into quarters, then each quarter was cut in half, leaving eight approximately equal slices. These were called ‘pieces of eight’.  The American term 'two bits', is from these times, when two of these pieces were equal to a quarter of a dollar, or 25 cents. In New South Wales, each quarter section was cut into two pieces, a two-thirds section which was called a shilling and a one-third section which was called sixpence. With little money to be used as currency, other ways of trading were used. People bartered, or swapped, for goods and services with anything they had. Rum, livestock, flour, pork, tobacco and tea were the things most commonly used as currency.

By 1800, most of the Spanish coins had disappeared, and coins from different countries were being used in the colony. The problem was that they all had different values. Governor King tried to sort the confusion by allocating English money values on the different coins.

In 1812, 40,000 Spanish dollars were shipped to Governor Macquarie, with instructions that he was to make sure they remained in the colony. Macquarie employed a silversmith, convict William Henshall, to punch out the centre of each coin, leaving two parts: a ring and the centre part, the dump. Each of these was stamped with its value, the ring being worth five shillings and the dump one shilling and threepence. By 1820, the rings had become known as ‘holey dollars’.

From colonial times until 1966, Australia followed the British currency system of pounds, shillings and pence.

Twelve pence, or pennies, equalled one shilling.
Twenty shillings equalled one pound.
One pound and one shilling was a guinea.

The change to decimal currency
In February 1966, Australian currency was changed to the decimal system. There was much debate about what the basic unit was to be called. The Prime Minister of the time, Sir Robert Menzies, wanted it called a ‘Royal’. However, the popular choice was to call it a dollar, in line with many other currencies in the world.

Ten shillings became a dollar and one pound became two dollars. In addition to one and two dollar notes, there was a five dollar and a ten dollar note. The first decimal coins all had an image of Queen Elizabeth the Second on one side and an animal unique to Australia on the other, although later there were some changes. The coins of least value were the one cent and two cent pieces. Both were copper and replaced the halfpenny and penny.  The five, ten and fifty cent coins were silver. The fifty cent coin was originally round but was later made with twelve sides.

In later years it was decided the value of the one and two-cent coins was too low to be considered useful so they were removed. By 1985 the paper one dollar notes wore out too quickly and it was decided that a dollar coin would last longer.

In time, twenty, fifty and one hundred dollar notes were put into circulation and the two dollar note was replaced by a coin.

Go to Page 2, today's Australian currency

Go here to see the current value of an Australian dollar compared with money from other countries. This is called the exchange rate.

If you use any part of this in your own work, acknowledge the source like this:
Sydenham, S & Thomas, R. Australian Currency [Online] (2008)

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