Meet the 'green dollar' society

By SIMON COLLINS

When Lynette Hansen and Greg McNamara get married, they will honeymoon on "green dollars."

The couple, who live at Thorntons Bay near Thames, live on a low income from craftwork and accident compensation. Their planned honeymoon through New Zealand would be impossible if they had to pay cash.

But they are members of the Thames Local Energy Trading System, which allows them to build up credits in "green dollars" by selling home-made bracelets, necklaces, cards and souvenirs to other exchange members.

They can then use those credits to buy services in green dollars - including homestays with members of other green dollar exchanges. Or gardening.

"Being a craftsperson, I hate gardening, I hate it with a passion," Lynette Hansen said. "I was able to get people coming in to do my garden for me, which meant I could do my crafts."

The couple are part of a growing phenomenon of local trading systems around the world - a surprising counterpoint to the globalisation of the world's dominant producers.

In Australasia, the leading example is Bartercard, founded in 1991, whose NZ turnover was $160 million in the past year - enough to allow it to be the major sponsor of rugby league's Bartercard Cup.

Its 5000 NZ members are mostly small businesses trading an average of $40,000 a year on Bartercard. Transactions are similar to other credit card purchases, except that Bartercard charges no interest and its cards can be used only to buy from other Bartercard members.

In effect, Bartercard acts like a bank, letting members buy from other members on credit, on condition that they sell items to other members.

But it is more than a bank, because its 120 staff are an extended sales force for its members, finding them new customers among other Bartercard members to make sure everyone can balance their sales and purchases.

For this, members pay a negotiable $975 plus GST in cash to join, and then fees of 5.5 per cent in cash and 1 per cent in barter on every Bartercard sale or purchase. Adding the fees paid by sellers and buyers means Bartercard takes 13 per cent on every transaction.

It is a risk-free way of buying things people could not otherwise afford, because Bartercard's trade coordinators guarantee that they will help businesses earn back any money that they spend on barter.

"I have a client who has a bin hire and firewood depot," said Duane Bennett, a senior trade coordinator.

"I called him because I found him some garden trellises and dog kennels. He's in a semi-rural area and I said, 'You can get these trellises because you have landscape systems, and dog kennels would look great - how about we spend some of your current credit balance and purchase some trellises and dog kennels?'

"That's an additional product that complements his product. I put them in contact, and away we go."

Margaret Walsh of the Titirangi hair and beauty salon Face & Body used Bartercard last month to buy a bracelet from Henderson's Auckland Ring Company for a staff member who was leaving.

In turn, she sells haircuts and beauty treatments to other Bartercard members, and tries to steer them to quiet times of the day.

"They are aware that there is a really busy time from 5.30 to 9 pm. So they fill your book [at off-peak times]. It's wonderful."

Most members do no more than 15 to 20 per cent of their business in barter, because they need real cash to pay many costs, including taxes. Inland Revenue charges GST on Bartercard transactions, and requires payment in cash.

Another Australian-based group, Business Barter Exchange, and Christchurch's Tradecard have entered the local market.

Tradecard, started in 1999 by former Bartercard member Lindsay Welch, charges fees of only 4 per cent each way (8 per cent in total) on barter deals and, unlike Bartercard, allows members to do deals that are only partly on barter and partly in cash (for higher fees). It has 600 members.

In contrast, "green dollar" schemes like those in Thames and Taranaki use volunteers to avoid charging commission. But they operate on the same principles.

In Thames, the 180 members ring an answerphone to report every transaction. These are then picked up daily and recorded on a computer.

At the monthly market, which accounts for more than half the transactions of between $4000 and $10,000 a month, sellers are given forms on which all sales are recorded. The next market is next Saturday, starting in the Grahamstown Hall at 8.30 am.

Wayne Smith, a former printer who took redundancy when the local paper shifted its printing out of town, has built a tiny, cramped home workshop where he repairs old books and makes novelty pads and books out of bamboos and possum skins.

He and his wife, Suzanne, use their earnings to buy extras for their three children aged from 5 to 11.

"It has in the past been very important when things have been really tight - anything from fresh fruit and vegetables to clothing, toys, even labour to help with gardening and that," he said.

The Thames exchange's quarterly directory of members' services, or Green Pages, has been supplemented by an e-mail network connecting 66 of the 180 members - allowing members to list and trade things more quickly.

But organiser Maureen Mallinson said the group would never give up the monthly market because people liked the social contact.

In Rotorua, a small group of 40 will hold an "intertrade" market tomorrow at the Sunset Primary School, at 1 pm.

Organiser Richard Totton said the group had acquired too many credits from members of other exchanges homestaying with Rotorua members on holiday. In return, it needed people from other exchanges to provide items for sale.

He was unemployed when the group started eight years ago and was able to earn green dollars through gardening, rubbish removal and labouring.

"When I was unemployed, the benefit came in, the bills got paid and what was left over went on food," he said.

"You couldn't afford cakes or jars of jam or something like that. Just being able to get those, and clothing, from within the group is often a help.

"Sometimes it's just having a group of people that you can call on for help. One of our members had a flat battery. I went round with a pair of jumper leads and got her car started. That's just having people you can call on rather than having to pay someone.

"It's the social aspect. I have developed a lot of friends within the group, and there is always someone worse off than me that needs help. If I can help them for an hour or two a week, it makes me feel good and it helps them."

Exchanges can be harder to sustain in cities.

In the 1990s, Auckland Green Dollars was the largest such exchange in the world, because everyone who joined the People's Centre was automatically entitled to join Green Dollars. But it has faded away.

Suzanne Paul, a volunteer at the Combined Beneficiaries Union who is keen to re-establish the group, said the old system was destroyed by inflation.

"When you got someone in Green Dollars charging $60 an hour for their labour - that is three or four years ago - I tackled the person for doing it. It was meant to be an economic and social support system more than anything else."

But one small group still flourishes in Auckland.

It is the Western Area Green Dollar Exchange System (Wages), which will hold its monthly market today at the Grey Lynn Community Centre in Richmond Rd, from 10 am to 1 pm.

Valerie Longworth, who leads the 110-member group, said that when the system started in 1993, many members were unemployed and green dollars helped to keep them afloat.

Although there are still some beneficiaries, the mix has changed.

"A lot of them work, so they only have the evenings and weekends to do things."

Wages issues "market money" in denominations such as 50c and $1. Buyers get tokens when they arrive. The amounts are deducted from their green dollar accounts, and at the end of the day sellers hand the tokens back to the organisers to have their earnings recorded.

Recognising the social value of these small transactions, Inland Revenue has ruled that green dollar earnings are not taxable unless, as in Bartercard, they are part of a genuine business.

But Work and Income NZ has taken a harder line. Spokesman Pat Thomas said regular green dollar earnings were treated the same as cash, and benefits would be cut if beneficiaries earned above the allowable limit.

That limit is $80 a week for most benefits, but the accommodation benefit is cut by 25c in the dollar from the first $1 of regular earnings.

Green dollar groups have lobbied the Government to get a bigger exemption for green dollar earnings.

Mr McNamara, a former mechanic who now lives on accident compensation, admitted that he was sceptical about green dollars when he first met Lynette Hansen.

But now he can see the benefits.

A quarter of her jewellery sales and cards are now in green dollars, allowing her to buy "clothes, food, jewellery for my kids" as well as gardening.

Said Lynette Hansen: "I couldn't imagine my life without it now, just for the social aspect - I have met some really lovely people. It becomes a way of life."

Links

Bartercard

Trade Card

Business Barter Exchange

Grey Lynn Community Centre