5c coin goes despite complaints

More than 900 identical letters from dairies and small retailers were sent to the Reserve Bank in defence of New Zealand's 5c coin.

Despite those pleas, the bank confirmed yesterday the coin will go and that new 50c, 20c and 10c coins will be introduced in July next year.

It had received 2050 submissions on the matter, including 456 e-mails, 124 individual letters, 186 submissions from school students, and 1284 photocopied form letters.

The 900 letters from dairies and small retailers were forwarded to the Reserve Bank by a confectionary manufacturing company - and many of the school students were also concerned about their power to purchase sweets.

Adults who sent individual e-mails or letters favoured retaining the 5c coin by 58 per cent to 39 per cent, with 3 per cent neutral.

Most people who wanted the 5c to stay were concerned prices would rise if it was gone, and about 300 identical letters saying so were received from Grey Power members.

Suggestions included a 25c coin and a $5 coin, the Reserve Bank said.

The new 50c, 20c and 10c coins will keep their current design and the Queen's head. The new 10c coin will be copper coloured. Shops would accept existing coins as legal tender for three months after July 2006 but would give customers the new coins as change, the bank's currency manager Brian Lang said yesterday.

He was aware that 5c coins - which the bank described as "just a nuisance" - were piled up in jars and drawers in people's homes.

"But people shouldn't panic over their coins, as this change isn't going to happen until the middle of next year," Mr Lang said.

In October 2006, the old 5c, 10c, 20c and 50c would be demonetised, making them no longer legal tender.

"I must emphasise that the existing coins will always be redeemable for face value from the Reserve Bank or its agents," Mr Lang said.

The Reserve Bank was still receiving 2c and 1c pieces, withdrawn in 1990.

Operators of vending machines and coin counting machines would be given samples of the new coins for testing in December, with samples available to the public in June next year.

Shares in Auckland-based Vending Technology (VTL), which supplies and operates machines, rose 4c to 95c after the announcement yesterday.

Existing silver coins were a copper/nickel mix, but nickel had increased in price by 50 per cent over the last 12 to 18 months, the bank said. The new coins were plated steel, coated with nickel to give a silver appearance to the 50c and 20c, or copper to give the 10c a reddish appearance. The changes would save the taxpayer about $2 million annually, the bank said.

The Foundation for the Blind had expressed support, especially for the "Spanish flower" edging on the new 20c.

The Reserve Bank was confident competition would restrain price increases after the 5c went, as a survey after 2c and 1c coins were removed found prices actually fell slightly.

Most retailers use a Swedish system of rounding prices up or down to the nearest 5c.

From July next year, cash transaction totals will be rounded to the nearest 10c.

Electronic transactions, such as eftpos and credit card payments, would not be affected, as rounding up or down only applied to the total amount of cash transactions, the bank said.

Yesterday, the Retailers Association said the resulting pricing model would turn off customers, and there was a potential for prices to rise.

The National Party's Katherine Rich asked what would happen to the cost of sending mail, pointing out that a standard domestic stamp was 45c.

New Zealand Post spokesman Ian Long said that having just become aware yesterday that 5c coins were to go, NZ Post would have to consider its options. "At this stage it's far too early to determine what we'll do," he said.

- NZPA