Currency coins

aus-coinsThe only money that is created by the Australian government for the benefit of the Australian people - is the currency coins that we have in our pockets and which we use for our everyday purchases.

The Royal Australian Mint is the agency that is responsible for the actual manufacture of these coins. Their web site states that:

The Royal Australian Mint is a prescribed agency within the Commonwealth Government portfolio of the Treasury and is the sole supplier of Australia's circulating coinage.

mint-summaryThe Royal Australian Mint manufactures all of the coins we have in circulation - and then sells these coins (on behalf of the Treasury) to the RBA at face value. The difference between the cost of manufacture and the sale price is called seigniorage.

Following the sale of coins to the RBA, the Royal Australian Mint then credits the Treasury with the seigniorage (i.e. the profit). Specifically - the Mint remits the seigniorage to the "Commonwealth Public Account".

treasury-seigniorageIn turn, the RBA sells these coins to commercial banks - at face value. Consequently, the RBA does not make any profit from this transaction.

As an example - it may cost the Royal Australian Mint 5 cents to manufacture a 1 dollar coin. This coin is then sold for $1 (i.e. the face value) to the RBA. The seigniorage of 95 cents then accrues to the Commonwealth.

The annual report of the Auditor General on the Treasury (for the year ending 30 June 2002) is attached below. An extract from this report (which is given on the right) details that the seigniorage that accrued to the Treasury for that fiscal year was $129 million.

 

Attachments:
Download this file (Treasury-2002-Audit-Report.pdf)Treasury 2002 - Audit Report1661 kB