SKY NEWS WITH TOM CONNELL
THURSDAY, OCTOBER 5 2023
TOM CONNELL (HOST): $1 coins will be the first to feature King Charles III, they'll begin appearing in tills and banks across the country before Christmas this year. Joining me for more on this, the Assistant Minister for Treasury Andrew Leigh, who revealed the new design at the Royal Australian Mint this morning. But you didn't grab a coin? Can't you just say, "excuse me, I'm the Minister here, give us one of those coins."
ASSISTANT MINISTER FOR COMPETITION, CHARITIES AND TREASURY, ANDREW LEIGH: No special benefits for ministers, Tom.
CONNELL: So, is this a proud day to unveil this? Do you have a mixed feelings as a Republican? How did you feel unveiling King Charles III?
LEIGH: This is an exciting moment for Australians. I mean, for seven decades, we've had the Queen in our coins, right back to 1953. Since decimal currency came in in 1966, there's been some 15 billion coins produced with Queen Elizabeth II on them. So, for many Australians, this will be the first time they've ever held in their hands a coin with a King on the back.
CONNELL: I know there are some real coin nuts out there. My granddad actually collected a lot of coins.
LEIGH: Enthusiasts, I think we call them!
CONNELL: Enthusiasts, yeah. So, are there sort of limited edition ones that people can hope to have as part of the inheritance one day?
LEIGH: Look, our first priority was just to get a lot of them out into circulation. We don't want to make this an elite sport. We know that there's a mass demand for coins with the King, and so there'll be some 10 million $1 coins, the classic ‘mob of roos’ coins, that will flow out to circulation before Christmas. And then next year, we'll have the collectible coins, and we'll have a King on the five cent, ten cent, 20 cent, 50 cent, $2 coins.
CONNELL: So, next year the sort of coins where it's a bit of a this is the first time we've got the King on and marking that in some way on the front as well. And that'll be your sort of collector's item
LEIGH: Yes. So, the King's effigy will appear on the $1 coin at first and then will flow out to other coins. And typically, then on the tail side, there'll be the usual designs that people are used to seeing.
CONNELL: Is there a change automatically or do we have to decide, if we did become a republic, would there be an automatic sort of the kings gone and something else there?
LEIGH: I haven't turned my mind to it, Tom. We will become a Republic at some point. Right now, we're focused on constitutional change of a different kind, getting a yes vote to a Voice to Parliament.
CONNELL: All right, you're not going to amble that down that path with me, then. Okay, here's another one. What about the five cent coin? Time to go?
LEIGH: When you remove an even-numbered denomination, then the rounding problem is straightforward. And so we got rid of the one and two cent coin. One and two goes down, three and four goes up. All very straightforward. You remove an odd denomination and suddenly you've got a rounding problem where it's not obvious whether ninety-five cents becomes ninety cents or a dollar. Because of that, we've kept the five cent coin in place.
CONNELL: You keep it forever, though, if that's the logic?
LEIGH: Well, at the moment it costs a little more to produce than its face value, around six, seven cents. But it's not a major loss for the system until given that we have the rounding issue, I suspect the five cent coin will stay in place for a while.
CONNELL: It'll stay, all right. I've read it's legal to pay any debts of up to $5 in five cent coins. So, if someone tries to pay you $10 in five cent coins, you can say, no, that's too small a denomination.
LEIGH: Many Australians would be thinking to themselves, it's a rare debt that I've had paid in coins in a long time. But they are special. People enjoy holding a coin their hands, and they last a long time. I held up at the Mint this 1985 $1 coin, which has been around obviously for nearly 40 years. I think many Australians will still be spending money with a Queen on the back for decades to come, given the billions of coins with Queens that are in circulation.
CONNELL: Well, we used them to play two up at school. The school didn't like it, but we were adamant we were teaching ourselves maths. But anyway, I want to ask you about changes to franking credits. This is sort of complicated, so if I can reduce it to this element, the change, that means companies that want to reinvest profit in the business won't be able to store franking credits. So, they have to either use that franking credit up or it's gone. Does that make it effectively a disincentive for business investment by making that change?
LEIGH: Look, we're keen to ensure maximum business investment after a period under the Coalition where business investment languished. Stephen Jones has carriage over this particular reform and it's gone to the Senate Economics Committee. They've made some recommendations and the government will consider those recommendations.
CONNELL: For that particular element, if you're told if you use it for business investment, and then at the moment, if you do that, you can store up the franking credit for later. If you can no longer do that, doesn't that make investment less attractive for companies?
LEIGH: We're keen to boost business investment. So, you would have seen that through the business incentives and the latest budget and also through our investments in education, which are all about making Australia an attractive place to do business.
CONNELL: Doesn't this go the other way, though?
LEIGH: Look, the specifics of this are being worked through by the Senate Economics Legislation Committee. It is a complicated piece of legislation. I wouldn't pretend to understand all of the details there, but we're consulting openly and we'll be listening to all stakeholders.
CONNELL: Okay, I want to ask you finally about the RBA because you like to ponder sort of new ways of doing things. Is there a way to use a less blunt tool to manage inflation, do you think?
LEIGH: Monetary policy is the tool that most major economies use. Providing independence to a central bank has seen inflation come down considerably. If you look to the 1970s, not just Australia, but a range of other countries, Tom, had double-digit inflation that hurt everyone, damaged business confidence. So, an independent central bank setting monetary policy has been an effective tool for Australia for decades. I don't anticipate us moving away from that.
CONNELL: But is it something, again, you like to sort of cast the net out and look at all sorts of different options. Have you done that? Is it almost like democracy? Well, it's not a great form of government, but better than all the others?
LEIGH: I think independent monetary policy has served Australia well. You imagine if we went back to the days of the 1970s where you didn't have that monetary policy independence.
CONNELL: Well, I'm not saying get rid of it and do nothing, but whether there's something out there that's another way, or complementing it with something else, for example.
LEIGH: If there is Tom, then other OECD countries haven't alighted on it. The approach that we take follows most other advanced countries in the world. New Zealand, of course, the first to move to central bank independence and inflation targeting in the early 1990s, other countries then quickly following. The Reserve Bank Review is about modernising a great institution, but it wasn't about moving away from the central role of monetary policy in stabilising the up and down cycles of the economy.
CONNELL: Andrew Leigh, thanks for your time.
LEIGH: Always a pleasure.