The E-Sylum:  Volume 8, Number 15, April 10, 2005, Article 13

NEW ZEALAND COINAGE CHANGES

Martin Purdy of New Zealand writes: "A few comments
on Dick Johnson's item last week, just to offer some
adjustments or personal views here and there. First, the
word "dime" isn't used in New Zealand, except when talking
about American coins, so our smallest coin after October
next year (when the old coins are demonetised) will be
called the 10c piece.

[NOTE: I borrowed the headline used in the National
Business Review article referenced by Dick, so I'll take the
blame for this. The full headline was "The dime is the new
penny: RBNZ changes coin structure." -Editor]

The $1 and $2 coins are in aluminum-bronze, not
copper-nickel.

I don't believe it's correct to say that all transactions MUST
be in multiples of 10c after July 2006; just as now, they don't
have to be in multiples of 5c. Goods may still be priced to 99c,
and if you pay your bill by credit card or direct debit (as about
90% of transactions are these days), you pay exactly that
amount. It's only if you tender cash that the bill will be rounded
up to $1 or whatever the nearest multiple is. Likewise if you
buy five items at 99c at the moment, you pay $4.95 (5 x 99c)
either by cash or credit at the moment, not $5 (5 x $1). After
next year the same principle will apply, though the rounding
will be different: ten items at 99c will still be $9.90 (10 x 99c),
not $10 (10 x $1).

It isn't unprecedented, either - what about countries like
Denmark, where small coins have progressively been phased
out to the point where the smallest denomination is 25 ore?
One of our numismatic colleagues, who may be on this list, told
me that when Denmark still had a 10-ore stamp (but no 10-ore
coins any more) he tried to buy a single one from the post office
and was thrown out for his trouble!

While I'm not completely happy having 10c NZ - about
USD 0.07 - as our smallest coin (it must be one of the
highest-value "smallest" coins in the world), it's probably quite
overdue in terms of spending power. As I understand it, the
50c coin these days has, at most, the spending power of about
5c in 1967, when decimal coinage was introduced here, so 10c
= 1c, which was our smallest coin at the time. By the same
token, however, our smallest banknote *should* henceforth be
$10 (= $1 in 1967), not $5 as at present, and we should also
have a $1000 note! Our largest paper denomination has in
theory never changed: given the two-for one changeover in
1967, the £50 note that was originally issued in 1934 is the
"same" as the $100 today, though our present note will
represent only a small fraction of the earlier note's
commercial value.

Here's a link to the TV News video from March 31 -
have fun with the NZ accents!
TV News video

The Reserve Bank of NZ announced its proposal late last year
and called for submissions from the public and other interested
parties; the changes announced on March 31 look exactly like
the original proposal as far as I can see, strangely enough!

Thanks for the title of the NBR article, which I've just looked
up. Dr Bollard's comments about spending power being under
a tenth of 1967 values confirm my understanding. As for the
words "dime" and "penny", I can only think that the writer was
aiming at a US audience (or is himself an American??), as
neither of those terms is ever used in this country for the ten
and one-cent pieces.

As an aside, there is quite some fuss about what will happen
to our postal charges, as the cost of sending a standard letter
is 45c. Will it go up or down? I wrote in one of our local
papers a few months ago that you just have to buy two
stamps and you can have them for the correct price! People
forget that back in 1967 we had 2½c stamps but no ½c coin,
and people managed somehow. "

  Wayne Homren, Editor

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