Out go the copper decimal coins

Almost a quarter century after the first one- and two-cent coins began to jingle in the pockets of Australians, their time was up.

In a decision of unsentimental economic rationalism, then Treasurer Paul Keating killed off those little brown coins, endearingly embossed with the feathertail glider and the frill-necked lizard.

Cabinet papers for 1990, released by the National Archives of Australia, reveal there were few objections.

Keating's submission to cabinet in August 1990 called for an end to production as purchasing power of the one and two cent coin was practically nil.

As well, most consumers regarded them as a nuisance, they cost more to produce than their face value and their departure would not add to inflation.

Keating said it cost 2.8 cents to make a one cent coin and 5.3 cents for a two cent coin and that was costing the budget around $6.7 million a year.

The high loss rate of these little coins, plus some hoarding, meant they needed to be continually produced to maintain sufficient stock in circulation.

With the introduction of $1 and $2 coins, Australia had eight different coins in circulation. A six-coin system was universally accepted as the most efficient, he said.

As for purchasing power, Keating said the five and 10 cent coins of 1990 could buy less than could the one and two cent coins when they were introduced in February 1966.

Keating conceded there would be community concern, including that supermarkets would profit by rounding their prices up to the nearest five cents, thus adding to inflation.

"Indeed, when viewed against the potential savings to the government and the community both in terms of costs and convenience the change may soon come to be widely supported," he said.