Heads or tails — or notes

Press, 24 April 1987, Page 16

Heads or tails — or notes

The case for a dollar coin instead of a paper note is not hard to make. A coin lasts up to 60 times longer than a note yet the cost of issuing them is about the same.. Switching to a coin will bring considerable savings in the cost of replacing notes battered after six months in circulation. A switch to the longlived coins also brings considerable savings in distribution costs. But it might have been expected that few people would prefer coins over paper money. Coins are bulky and heavy; a bulging wallet seems preferable to a jangling pocket.

It is something of a surprise then to learn that a Treasury-commissioned survey found majority support for the introduction of $1 and $2 coins, and lesser enthusiasm for a $5 coin. This will be welcome news for the Treasury, which has intended to introduce a dollar coin for some time. Mindful, no doubt, of the grumbling experienced in Australia, when a dollar coin was introduced there in 1984, and the resistance encountered in Britain when a pound coin was issued a year earlier, the Treasury and the Government have been preparing the country for a switch for the last two years. This might help to account fur the general acceptance of the proposal. In Australia it was found that the only way to get people used to the $1 coin was to withdraw from circulation the bulk of $1 notes.

Another part of the reason for support for a coin might be found in the general tattiness of most New Zealand $1 notes. In spite of the high turnover in new notes being issued and old ones being destroyed, $1 notes soon become dirty and generally the worse for wear. Inflation is the cause. As prices go up, more dollar notes are being used more frequently as a conveniently valued means of exchange and their pocket life has shrunk. As prices have risen, too, slot machines have become more voracious. In many coinoperated vending machines a dollar coin would be a great convenience; no doubt the machines will be altered as soon as the coins become available.

The march of inflation also seems certain to put an end to the 1c and 2c coins, much as it put an end to the farthing. These coins have become so lowly that many people avoid them or ignore them. Such coins now cost more to issue than their face value: the 1c costs 1.6 cents to put into circulation and the 2c costs 2.3 cents. The same survey that found support for the introduction of a $1 coin discovered that three-quarters of those surveyed thought that the 1c and 2c coins should be phased out, and that more than half of those surveyed supported the idea of dropping 5c coins. The end must be near for the smallest coins at least.