Friday, July 16, 2010

Eliminating the penny? Two bits for some thoughts ...

It's been discussed, somewhat jokingly in private members bills, over the years.   But now it's none other than our own Canadian national mint that is saying it's time to do what Australia and New Zealand have done for their respective currencies, and what two Euro zone states -- Finland and Netherlands -- have done, eliminate the one cent coin and go to what's called "Swedish rounding" (round to the nearest five cents for prices ending in 3,4,6 and 7; and to the nearest zero for 1,2,8 and 9).

Why?   The coin long ago stopped being copper.   We tried zinc for a while like America does for their Lincolns, but even that got expensive.   And the steel blanks we use nowadays cost a cent and a half each, so the money's not even worth what it's made of anymore.

Hoarding pennies is a long standing tradition and many churches still have "penny sales" every now and then.   And there's a lot of sentiment attached to any denomination being removed.   It's not like the switchover from the one and two dollar bills to coins which were quite well received here -- unlike in the States, where the one dollar coin is still viewed very much with suspicion and many still believe the $2 bill is fake (it's not) or even "unlucky".

I would have thought this was bonkers at one time, but it might actually be a good idea if it was implemented properly.    This isn't a massive operation like "decimalization" in the UK and Ireland back in 1972 (remember pounds / shillings / pence with 20 shillings in the pound and 12 denari in the shilling -- no wonder why they went to decimals!) or the Euro "big bang" in 2002 when 12 currencies had to be triangulated.   I'd like to meet someone who still has a "half crown" (2s /6d which converted to 12½ p).   Or a half pence for that matter!

But we'd have to do it carefully.   Given we're moving to polymer bank notes beginning next year (in an attempt to stop counterfeiting, and we should) it might not be the right time.   However, since the Aussies and Kiwis figured it out and PMS is so determined to maintain our Commonwealth links at any price (even if many of the other member states are irredeemably corrupt) it's something we may want to ask their advice on.   And of course, we need a full debate in Parliament.   Maybe this is one thing in which a free vote would be warranted.

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1 comment:

Anonymous said...

1) Getting rid of the penny makes total sense and has nothing to do with PMSH's desire to... propagate the Commonwealth, or whatever (where do you get that, by the way?).

2) So far as Commonwealth states go, Australia and New Zealand ain't so bad.