This article was published on 29 July 2006. Some information may be out of date.

Q&As

  • Should we have a new 25c coin instead of a new 20c coin, and also a $5 coin?
  • Is tithing the way to go? One reader says yes, another no.

QThe following is an approximate copy of my letter to the NZ Herald, published recently. I would be interested to know if you would like to comment on this subject.

“I am appalled at the latest decision concerning NZ coinage. If the authority had re-introduced a half crown (a quarter), and dropped the 20c piece in addition to the 5c piece, we would have no small-price inflation as a result.

Items currently costing 25c, 35c and so on would all remain the same. However as matters stand, when items currently costing 20c need to increase, they will go up to 30c, a 50 per cent increase!

This will be tough on Mums and pocket money. How is it that this authority can make decisions affecting us all without consulting us?”

AOn your last question, the Reserve Bank says it “has undertaken some analysis of the potential impact of the removal of the 5c coin.

“This work, which was posted on the Bank’s website in December, concluded that the effect on prices faced by most households would be negligible. Statistics New Zealand checked this analysis and confirmed that it was sound.”

I think that’s fair enough. If the government consulted us all widely on every decision, it would take so much time and money that nothing would ever be achieved.

More interesting, though, is your point about a 25c coin. The Reserve Bank’s initial response to this:

“The suggestion of introducing a 25c coin has been considered on a number of occasions without a great deal of support. A 1987 Treasury report concluded that a 25c denomination is inappropriate in a basic 10c system. A public opinion survey in 1994 showed a mixed response but the majority of people were opposed.”

Okay, I said, but the correspondent’s main point seems to be that, with 10c, 20c and 50c coins, we can pay the following: 10c, 20c, 30c, 40c, 50c etc. But if instead we had 10c, 25c and 50c coins, we could pay: 10c, 20c (2x10c), 25c, 30c (3x10c), 35c (25c + 10c), 40c (4x10c), 45c (25c + 2x10c), 50c etc. There would be much more flexibility.

Back came the following, from the Reserve Bank’s head of currency Brian Lang:

“Our underlying criterion is not to make changes unless there is a very clear benefit to the public. Feedback from retailers was not supportive of introducing a 25c coin, as it would result in them needing to hold additional coins in the till.

“Quoting your examples: 30c in change is three coins rather than two; 40c is four coins rather than two,etc. The retailers estimate that it would increase the number of coins they would handle by 23 per cent.

“The Bank considered that there was no significant benefit for the public or retailers in introducing a 25c coin, thus our underlying criterion prevailed.”

You could argue that retailers shouldn’t hold sway. But, for the rest of us, big-price inflation matters much more than small-price inflation.

I think you’d find that most other people don’t care all that much about 20c v 25c — given all the other worries in our lives.

And kids who are in for big pocket money increases will love it.

Here’s another interesting point about the coin changes, in a recent Cairns Lockie newsletter: “We are surprised with the revision of our coins that our notes are not being reviewed. We could easily replace our $5 and $10 notes with coins.

“Back in 1967 when decimal currency was introduced a 50-cent coin was introduced. In today’s money this will now be worth $9 or $10.

“In the United Kingdom they have a two pound coin, which is worth about NZ$6. We think it is time to replace those dirty worn $5 notes with a new and more convenient coin.”

The numbers are a bit iffy. According to the really useful CPI calculator on the Reserve Bank website, www.rbnz.govt.nz, 50c in July 1967 bought as much as $7.06 does today. But the point is a good one.

Again, a response from Lang: “The question of replacing the $5 bank note with a coin was considered by the Bank during the recent review of our coinage.

“While it may seem an obvious option given the devaluation of currency over time, there are quite strong counter arguments against having additional coins.

“One problem with coins is that they cannot be secured to the same extent as a bank note. It is understood that the UK has significant problems with the counterfeiting of two pound coins and, of course the higher the value of a coin, the greater the temptation.

“Another important factor is that the general public prefer to carry bank notes rather than coins. In countries where a bank note and a coin have circulated together, a clear preference has been shown for the note.”

This begged the question: Is it easier to counterfeit coins than notes?

Lang: “Not necessarily, but notes have security features that are easily seen by the public (such as a watermark); coins really have no easily verifiable security feature.

“In addition central banks and cash centres have fairly sophisticated machines checking ‘hidden’ security features in a note; coins are not subject to such scrutiny.

“The problem they have in the UK and in Europe with the higher value coins is that they are unsure how many fake coins are circulating as they go undetected.”

Sounds a little alarming.

Anyway, look out for the new coins from Monday onwards. New and old coins will circulate until November 1. From that date, retailers will no longer be obliged to accept the old coins.

QTithing — an interesting article two weeks ago. My husband and I and our parents before us believed in the principle of tithing. Having been owners of a real estate company selling hobby farms we also believe in the necessity of mortgages.

We have prospered by hard work and tithing. We are indeed blessed financially if we follow Biblical advice and give “back to God” with a spirit of willingness, thankfulness and cheerfulness 10 per cent of our income.

ATithing has obviously worked well for you. Read on for another perspective.

QIt was with interest I read your column about tithing and how hard it can be to save 10 per cent of your income.

The previous week my wife and I had been to see a financial advisor who included in his list of questions: “Do you tithe?”

Being a Christian I realise this is quite a common practice among religious organisations but would like to point out that the Bible nowhere commands Christians to tithe 10 percent of their income.

Ideas like this are due to taking parts of the Bible out of context. You also state that, ” Indeed, various biblical quotes seem to contradict one another”, which can be quite true if they are taken out of context, historically or textually.

I don’t want to turn this column into a religious forum but would just like to correct a few false ideas about tithing.

Tithing was only a mandate for the Israelites living under the Mosaic Law, which was at that time also a Theocracy. It was basically a tax on the landowner and people who had more than ten animals.

You could only tithe agricultural produce or animals. It did not include people’s incomes, money or other things like fish.

Tithing was effectively part of their welfare system and holiday pay system. It was to provide for widows, poor people, priests etc.

Malachi was saying God got pretty upset if they didn’t pay their tithes, as the people who would suffer would be the widows, poor people, priests etc., and equated the seriousness of this to the fact they might as well be robbing from God.

The New Testament principle for giving is freewill giving, and we are encouraged to be generous according to our means and be wise and good stewards of our money and possessions. Sounds like good financial advice to me.

I think this is quite an important issue as I once met a Christian who had tithed into debt using his credit card to the tune of tens of thousands of dollars in the hope that some day God would miraculously bless him and turn his finances around.

AThat doesn’t sound like that old saying, “God helps those who help themselves.”

But as you say, let’s not go further into religion. I’m in no position to judge whether what you say is correct, but it is interesting.

Mary Holm is a freelance journalist, a director of Financial Services Complaints Ltd (FSCL), a seminar presenter and a bestselling author on personal finance. From 2011 to 2019 she was a founding director of the Financial Markets Authority. Her opinions are personal, and do not reflect the position of any organisation in which she holds office. Mary’s advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it. Send questions to [email protected] or click here. Letters should not exceed 200 words. We won’t publish your name. Please provide a (preferably daytime) phone number. Unfortunately, Mary cannot answer all questions, correspond directly with readers, or give financial advice.