The Australian Dollar’s Decline
People are using cash less than they used to, and this is impacting Australia’s economy to the degree that the future of hard money has come into question. “As the use of cash for transactions has declined, the economics of cash distribution has come under pressure,” says Michele Bullock, Reserve Bank of Australia governor. Cash-distribution companies have warned that their businesses are unstable. Bullock has been meeting with leaders in the nation’s cash-distribution industry, urging them to put the public’s need for cash above their own business interests.
Cash payments made up only 16 percent of the country’s in-person transactions in 2022, down from 32 percent in 2019. Australia has just 5,693 automatic teller machines (ATMs), less than half the amount (13,814) it had in June 2017. Likewise, the number of bank branches has fallen from 5,694 to 3,588 in the last seven years. To make matters worse, interest rates were at a 12-year high of 4.35 percent at the time of this writing. “It’s important that people understand that we will do what we need to do to get it back down because the alternative is bad for everyone,” says Bullock.
Despite these challenges, Bullock and her team are moving forward with the design of a new $5 note, which will celebrate the culture and history of Australia’s Aboriginal groups. This new motif will replace Queen Elizabeth II’s effigy that has appeared on the $5 note since 1992.
A version of this article appears in the April 2024 issue of The Numismatist (money.org).