THE five-cent coin should be scrapped because it is too expensive to make and a nuisance, the Royal Australian Mint says. And the federal government is considering dumping it.

The government has received a confidential brief that shows it costs more than five cents to make each coin because of rising commodity prices. The decision to phase out the coin rests with the Assistant Treasurer, Bill Shorten, but he is worried about what the move would mean for charities, the principal recipients of five-cent and 10-cent coin donations. The last time Australia abandoned a denomination was in the early 1990s, when one and two-cent coins were dumped.

The five cent coin is in danger of being abandoned. Credit:Adam Hollingworth

A spokesman for Mr Shorten said the minister was considering abandoning the coin after receiving the Mint's advice. But the government would need to consider a potential consumer backlash if retailers rounded up prices to the next 10-cent point.

As Australia moves increasingly to electronic transactions and a ''cashless'' society, the five-cent piece is essentially redundant, a Mint source said.