Wednesday, November 01, 2006

Change for the better

As from today, some of our coins are no longer money. Naturally, there’s a story in that.

In January 2004, the Reserve Bank of New Zealand began researching proposed changes to the “silver” coins, which were among the heaviest in the world. The plan was to make the 50 cent, 20 cent and 10 cent coins smaller and lighter, and eliminate the 5 cent coin altogether (the 1 and 2 cent coins ceased being money on April 30, 1990).

Predictably, there were complaints that the elimination of the 5 cent coin would result in higher prices. Retailers, it was argued, would round prices up.

On July 31 of this year, new coins were officially introduced into circulation and people were given three months to exchange their old coins for new ones (you can read about it, and see a picture of the relative size differences in the coins, here). Apart from a few glitches, things proceeded pretty smoothly.

Now that the 5 cent coin is gone, we’ll see if there’s any change in prices. However, the majority of retail transactions in New Zealand are done electronically by EFTPOS (Electronic Funds Transfer at Point of Sale), using either debit cards or credit cards, and rounding is unnecessary for such transactions.

The new coins aren’t costing taxpayers, since the old coins were pre-sold to a firm that will melt them down to make Australian coins (glad to be of help, cobber). Talk about value for money!

So, as of today the old coins are no longer money, though the Reserve Bank will exchange “demonetised” coins for their new counterparts indefinitely. The day before the October 31 deadline, I gathered up all our old coins from drawers, boxes and such ($11.50, thank you very much) and deposited them in the bank. This included 30 cents I found in my car, a remnant of the change I kept there to feed parking meters. Clearly, I wasn’t very good at doing that.

I can’t imagine the US dropping the useless (and expensive to make) penny. Nor can I imagine them replacing the one dollar bill with a proper coin (and forget the lame attempt with the Susan B. Anthony dollar), just as New Zealand has one and two dollar coins instead of notes. But I still think, as I have for decades, that they should.

I guess I’m just selfish enough to be glad that the few coins I carry in my pocket are much lighter than the old ones were. Small change really is good.

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