DECIMAL CURRENCY Substantial Profit On Conversion

Press, Volume CVIII, Issue 31662, 24 April 1968, Page 1

DECIMAL CURRENCY Substantial Profit On Conversion

iNew Zealand Press Association)

WELLINGTON, April 23. New Zealand stands to make a profit of almost s4m on its change to decimal currency—even though the direct cost to the Government of the currency conversion was about s6.Bm.

This was one of the points made today by the Minister of Finance (Mr Muldoon) in a statement announcing that the change to decimal currency would be officially completed on Friday, May 31.

Other points listed were

The period between the start of the currency conversion on July 10 last year and its completion at the end of next month will have been just over 10 months—instead of the estimated 15 months. The direct cost to the Government of about s6.Bm was less than half the original estimates of well over sl4m. A credit had accrued in the coin account to date of about slom—representing profits from the sale of souvenir coin sets, the reclamation of silver and cupro-nickel from the withdrawn shillings and pence, and the normal “seignorage” on the decimal coins—which is the difference between coin costs and face value.

Sooner, Cheaper Examples of “seignorage” can be gained from the facts that the 50c coin costs 2jc to produce: and the production cost for the 20c coin is 2c. “It can therefore be claimed that we have completed our change to a simpler and more accurate money system with more convenient coins much earlier than was expected, and at no cost to the taxpayer." said Mr Muldoon. “In fact we have a net credit of more than s3m arising as a result,” he said, i The Minister said the figure ]of s3m would probably increase to nearer s4m when all i profits had been brought to i account.

, Eventually, this money would be switched from the 'coin account to the Consoli- ; dated Revenue Account.

Mr Muldoon announced that arrangements were now in train for the issue of the formal proclamations to give legal effect to completion of the decimal currency conversion, and the end of the transitional period under which pounds, shillings and pence were still legal tender. Commenting on the halving of the direct cost to the Government, he said:

“This had been due to simplified machine conversion methods, recruitment of skilled personnel from Australia, and a well-organised conversion programme.” At a press conference after the release of his statement, the Minister said that the Decimal Currency Board, which was set up to handle the change, would remain in existence until it had completed its business.

Jamaican Change One result of the success of the board’s work is that the board’s chief cost accountant, Mr G. W. Brown, will probably be sent to Jamaica to advise on its scheduled change to decimal currency next year. The Minister announced that of the direct cost to the Government of about s6.Bm, a total of $5.7m had been spent on machine conversion and that $300,000 had been paid out in compensation. During the change, 66,000 machines were registered as eligible for financial assistance.

Mr Muldoon said he was not prepared to estimate how much the Government had spent in overseas funds for the purchase of new machinery.