It has now been six full decades since Australia made the monumental shift from the archaic British pounds and pence system to modern decimal currency. While some Australians still remember using pounds, shillings, and pence, this transformative change fundamentally modernised the nation's economy and represented a bold step toward independence.
Pre-Federation Currency: Rum, Spanish Coins, and Holey Dollars
In the earliest days of Australia's penal colonies, currency was a chaotic mixture of foreign coins and even rum, which served as an informal medium of exchange. The situation began to stabilise in 1812 when New South Wales Governor Lachlan Macquarie imported 40,000 Spanish reales coins. These were ingeniously repurposed by cutting out their centres, creating what became known as "holey dollars" worth five shillings each, with the removed centres becoming "dumps" valued at fifteen pence.
By the 1820s, British Parliament legislated that all Australian colonies must adopt His Majesty's pound sterling as their official legal tender, establishing a more uniform but ultimately cumbersome system that would persist for generations.
The Australian Pound: A Federation Currency with Flaws
Following federation in 1901, Australia launched its very own currency in 1910: the Australian pound. While this represented national progress, the government showed little creativity in naming, and the currency inherited the same problematic structure as its British counterpart.
The system proved frustratingly complex for everyday transactions. One pound equaled twenty shillings, and each shilling contained twelve pence. Calculating change for something priced at £1 8s 3d when paying with £2 required considerable mental arithmetic, making simple purchases unnecessarily complicated.
The Decimal Revolution: From Royal to Dollar
The Menzies government finally announced that Australia would transition to decimal currency, with February 14, 1966 designated as Changeover Day. This move would permanently abandon the pound system and establish Australia as a forward-looking, independent nation.
In a remarkable public engagement exercise, Australians were invited to submit name suggestions for the new currency. The proposals included colourful options like Austral, Banjo, Batman, Boomer, Crown, Cygnet, Dinkum, Jumbuck, Regal, Schooner, Tasman, and Thistle.
Then in June 1963, Treasurer Harold Holt announced the government's choice: the royal. Holt defended this as a dignified, distinctive name that emphasised Australia's connection to the Crown. However, Australians overwhelmingly rejected this proposal, expressing such strong public outrage that within three months, the government relented and changed the name to the dollar. While perhaps less imaginative than "boomer" or "dinkum," this name ultimately endured.
The Great Transition: Dollar Bill and Catchy Jingles
To facilitate a smooth transition, pounds, shillings, and pence remained accepted as legal tender during the first two years of decimal currency, with ten shillings exchangeable for one dollar. The government launched an extensive public education campaign featuring a character called Dollar Bill, who sang a memorable jingle to the tune of Click Go The Shears:
In come the dollars and in come the cents
To replace the pounds and the shillings and the pence.
Be prepared folks when the coins begin to mix
On the 14th of February 1966.
Clink go the cents folks
Clink, clink, clink.
Changeover day is closer than you think.
Learn the value of the coins and the way that they appear
And things will be much smoother when the decimal point is here
Decimal Currency Today: Simplicity and Digital Evolution
Sixty years later, Australians have become so accustomed to decimal currency that alternative systems seem almost unimaginable. Today's debates focus not on pounds versus dollars, but on whether physical currency remains necessary at all, given that most transactions now occur digitally.
What many may not fully appreciate is how decimalisation significantly modernised Australia's economy by introducing a vastly simpler system. Remarkably, Australia completed this transition five years before Britain undertook its own decimal currency reform, positioning the nation as an economic innovator.
The shift from pounds and pence to dollars and cents represents more than just monetary convenience—it symbolises Australia's growing confidence and independence on the world stage, leaving behind colonial systems to forge its own economic identity.
