Coin change marks end for foreign invaders

massey-university

Fri Jun 02 2006 12:00:00 GMT+1200 (New Zealand Standard Time)

Coin change marks end for foreign invaders

Friday, 2 June 2006, 2:22 pm
Press Release: Massey University

Friday, June 02, 2006

PALMERSTON NORTH – Tens of millions of mostly Australian coins currently treated as legal tender in New Zealand are about to become redundant.

Massey University Banking Studies director Dr David Tripe predicts many people may be caught out with a surprisingly large number of Australian coins that have crept into common use when the Reserve Bank prepares to issue new 10c, 20c and 50c coins and scrap the 5c.

In nearly 40 years since decimal currency was introduced the echidna, the lyrebird and the platypus have become almost as familiar to New Zealanders as the tuatara, the tiki and the kiwi symbols that appear on the 5c, 10c and 20c equivalents.

A Reserve Bank survey of coins in circulation has indicated about 5 per cent of those denomination coins – or one in 20 – are foreign, predominantly Australian, which are identical in weight and size.

Dr Tripe says until now, no-one has really cared.
“Not only do they work in most parking meters and vending machines, shops either willingly or inadvertently accept them as payment and return them in change.”

But that is about to end as a result of the new smaller, lighter coins, which will be issued on July 31.

Vending machines and parking meters will be recalibrated to accept the new coins and could begin rejecting the old coins either immediately or after they are fully withdrawn on 1 November, when shops will no longer have to accept them.

After that only the Reserve Bank will exchange them but it will not exchange Australian coins or other foreign coins. Trading banks will decide for themselves whether or not to accept the coins.

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Dr Tripe predicts there may be a flurry of activity as people sort out jars of coins and take them into banks to exchange, only to find that they are handed back any foreign coins.

“Most banks will not knowingly accept Australian or any other country’s coins unless they have a special arrangement with the customer,” he says.

“I expect many people will then try to dispose of these coins either while shopping or in parking meters and vending machines.

“But they should be aware that they are probably technically guilty of fraud if they knowingly attempt to pass off foreign currency as New Zealand’s – that includes putting an Aussie 20c in the parking meter or handing it over the counter as payment.”

Dr Tripe says shoppers should also know they have the right to refuse to accept foreign coins as change.

“My impression is that the number of foreign coins has increased with the huge growth in international travel in recent decades, combined with the fact that inflation has reduced the spending power of coins throughout the world, so people are less worried about trying to spend all their foreign coins before they travel home.”

A recent Reserve Bank survey of 8000 silver coins – 2000 of each denomination – found 5 per cent of the 5c, 10c, and 20c pieces in circulation were Australian, with a few other countries coins also out there.

The bank has 584 million 5c coins worth $29.2 million on issue, along with 241 million 10c worth $24.1 million and 157 million 20c coins worth $31.4 million.

That would indicate up to 49.1 million Australian coins with a face value of $4.23 million may be in circulation, but Dr Tripe suggests it is likely to be considerably less as an unknown number of coins issued are thought to be permanently lost.

“It is also probable that a large number of New Zealand coins are circulating in Australia – we don’t know how many – which may cause problems over there in due course if they too decide to mint new, smaller coins.”

ENDS

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