Scoping Study—Terms of Reference

Royal Australian Mint

As part of its ongoing governance monitoring arrangements, and in line with the outcomes of the National Commission of Audit’s review and report on the performance, functions and roles of the Commonwealth Government, the Commonwealth Government is considering the future options for meeting the coinage needs of the Australian economy and the ownership of the Royal Australian Mint (Mint). 

The Mint, based in Canberra, was established in 1965 to produce the newly created decimal currency for the nation and is a non-corporate Commonwealth entity operating under the Public Governance, Performance and Accountability Act 2013. The Mint is a non-statutory agency operating within the Commonwealth Government portfolio of the Treasury, and is the sole supplier of Australia’s circulating coinage. The Mint’s vision is to achieve excellence as a profitable world class mint. The Mint strives to meet the circulating coin and collector coin needs of Australia and selected international markets. The Mint is also the custodian of the Australian National Coin Collection and provides educational and tourist services to local and overseas residents.

As the sole supplier of Australia’s circulating coin requirements, the Mint is responsible for the continuous review of Australian coinage and for providing advice to the Department of the Treasury and to the Government on coin related issues.

The Mint has one outcome: the coinage needs of the Australian economy, collectors and foreign countries are met through the manufacture and sale of circulating coins, collector coins and other minted like products. As set out in the Mint’s 2013-2016 Strategic Plan, the functions of the Mint have been divided into four products:

  • Circulating coin - Part of the national currency system of Australia that has real value and acts as a medium of exchange.
  • Numismatic coins - Used as a medium that represents real and intrinsic value and on which depict designs that tell stories about Australia, its history, heritage, environment, wildlife, culture and achievements.
  • Gallery - A community service that provides a visitor to the Mint with an education on the history of Australian coinage as well as how technology is being used in a contemporary manufacturing environment to produce metal products.
  • Services (minting, machining and consulting) - The Mint has a range of associated assets, knowledge and services that will be utilised to ensure the optimisation of the Commonwealth investment.

The Department of Finance (Finance), on behalf of the Commonwealth Government, will manage the scoping study into the future commercial arrangements of the Mint, in consultation with the Department of the Treasury. Finance and its advisers will liaise and consult with key stakeholders (as identified through the stakeholder management plan and communications strategy) during the course of the scoping study.

The scoping study will be guided by the Australian Government’s (the Government) Policy objectives of:

  • Smaller and more efficient Government;
  • Reduce regulation/red tape;
  • Assist small business;
  • Reduce the tax burden on the business sector; and
  • Improve the Commonwealth’s debt position.

Further, in the context of the Government’s Policy objectives the scoping study will be required to, among other things:

  • maintain service and quality levels for the Mint’s customers and private investors;
  • ensure any recommended outcome/s treat any affected Mint employees in a fair manner, including through the preservation of accrued entitlements;
  • minimise any residual risks and liabilities to the Commonwealth; and
  • having regard to the considerations and Government’s Policy objectives above, maximise the benefits to the Government.

The scoping study will involve consideration of and production of a report to the Government, to be submitted at a future date, addressing the following issues:

Commercial Review

  • a review of the Mint’s current business;
  • an analysis of the industry environment in which the Mint operates and the impact of any change in ownership or commercial arrangements of the Mint on that environment;
  • identification of the benefits, risks and costs of options available, including continuing business as is;
  • consideration of the corporatisation  of the UK Mint and lessons learnt from this process;
  • a review of potential restructuring options for either continued ownership, sale or other commercial arrangements;
  • potential investors, outsource providers or other parties relevant to a new commercial arrangement.

Legal Issues

  • an analysis of the Mint’s legislative and regulatory framework and implications of any changes to this as required by a change to the commercial arrangements;
  • review of existing legislation and any legislative changes required in relation to any recommended options;
  • identification of any security issues and mitigation strategies;
  • identification of other legal issues considered relevant to revised commercial arrangements.

Commercialisation Issues

  • the Commonwealth’s options in relation to meeting the coinage needs of the economy and its shareholding in the Mint, including:
    • identification of options for continued ownership, including benefits and risks etc, as well as optimal company structure and governance arrangements;
    • identification of options for a potential sale, having regard to the Mint’s business, the market, human resource issues, post sale conditions, legislative and policy issues, and comparable sales;
    • identification and analysis of other options for meeting the coinage needs of the economy such as outsourcing, concession and other potential commercial arrangements;
    • an analysis of the implications, risks and benefits (achievability, timetable including key dates, budget, policy outcomes) and estimated returns of all available options.
    • a detailed implementation plan for all recommendations put forward.

Policy Issues

  • analysis of Commonwealth Government policies and regulations relating to Australian circulating coins (including the potential merits and implications of reforming the coin array to increase seigniorage), numismatic coins and the other functions of the Mint, and the implications this may have regarding future commercial arrangements of the Mint.

Contact for information on this page: ASIC&Minttaskforce@finance.gov.au.

Last updated: 17 July 2014