The main purpose of this Bill is to give statutory authority for the change to decimal currency. This is the first piece of decimal currency legislation. It was originally introduced in the Dáil on 16th April as the Decimal Currency Bill but the Dáil was dissolved before the text was circulated. It is therefore necessary now to call it the No. 2 Bill.
In 1962, following consideration of the report of a committee, the Government decided in principle in favour of a change to a decimal system of currency. Subsequently, consideration was given to the manner in which the Government's decision could best be implemented. The opinions of business, industrial and other organisations—and of the general public—on the question of the choice of system were sought in 1967. In my Budget speech on 23rd April, 1968, I announced the Government's decision to introduce the £-new penny system on 15th February, 1971. Preparations for the change are proceeding satisfactorily under the general guidance of the Irish Decimal Currency Board which has been operating since June, 1968.
The basic objective in adopting decimal currency is to simplify money calculations. Under the present £sd system of currency the reckoning is in twelves, twenties and tens. Ordinary arithmetic involves enumeration in tens only. The benefits to be gained from bringing our money reckoning into line with ordinary arithmetic are real and substantial. They will be felt quickly in shops, in offices and in schools—to mention but a few of the sectors that will benefit. The advantages of the new system will greatly outweigh any temporary inconvenience or expense involved in making the change.
Senators will see from the Explanatory Memorandum which I have circulated with the Bill that most of the sections contain technical provisions relating to coinage. These follow the lines of provisions in the Coinage Act, 1950, which is to be repealed. The main new provisions in the Bill are in sections 2, 3, 9, 10 and 16.
Section 2 establishes the £-new penny system. The new penny will be equal in value to one-hundredth part of a £, that is, 2.4 of our present pennies. Instead of pounds, shillings and pence we shall have pounds and new pence. As I mentioned already, careful consideration was given by the Government over a number of years to the choice of decimal currency system. A special booklet which I issued in 1967 compared different systems and invited views. The weight of opinion favoured the £-new penny system. Britain will introduce the same system on the same date.
Section 3 and the First Schedule deal with the provision of the new coins. The denominations and technical specifications of the 6 decimal coins are listed in the First Schedule. The values of the new coins are as follows:—
50 new pence value 10/-
10 new pence value 2/-
5 new pence value 1/-
2 new pence value 4.8d
1 new penny value 2.4d and
½ new penny value 1.2d.
The three bronze coins for ½, 1 and 2-new pence will be lighter and easier to carry and to handle than present bronze coins. They will also have a weight/value relationship with each other—the 2-new penny coin will be twice as heavy as the new penny one and this in turn will be twice as heavy as the ½-new penny. This relationship will be an added convenience for all those businesses which handle coin in bulk. The total value of a bag of mixed bronze coins can be found simply by weighing.
The cupro-nickel 10-new penny and 5-new penny coins will have the same specifications and values as the present florin and shilling coins respectively. The highest value decimal coin will be the 50-new penny coin with value ten shillings. The issue of a coin, rather than a note, for the 50-new pence denomination was recommended by the Decimal Currency Board. Before making its recommendation the board had considered carefully the relative merits of the note and the coin and consulted interested trade, commercial and other bodies. The weight of opinion was in favour of a coin.
The arguments for a 50-new penny coin are convincing. It will be of considerable convenience to the general public for shopping. On economic grounds also there is a strong case for the coin. It has a life of at least 50 years—after which the metal is recoverable—whereas the ten shilling note has a life of only about five months and the costs of distributing new notes and withdrawing worn ones are considerable. The cost of issuing the 50p coinage—a once-for-all cost, virtually—will be only about twice the annually recurring replacement cost of ten shilling notes.
It has been suggested that we might have both coin and note but it is obvious that this would create public confusion and impede the changeover. No representative body has argued in favour of such a course.
In accordance with usual practice the designs of the new coins will be prescribed by regulations. Senators will, I hope, have seen the leaflet which I published some months ago giving details of the designs. Copies of the leaflet are available in the Library. Sections 9 and 10 of the Bill authorise the Central Bank to issue the 5, 10 and 50-new penny coins in advance of 15th February, 1971. These three coins have exact equivalent values in £sd and can be used in these values until the changeover date. It is proposed to start the issue of the 5 and 10-new penny coins this autumn and to bring out the 50-new penny coin early next year. Thus the public will be familiar with the three cupro-nickel decimal coins well before the changeover to the new system begins.
Section 16 of the Bill empowers the Minister for Industry and Commerce to prescribe how certain payments involving a halfpenny are to be varied when the ½d coin is demonetised on and from 1 August, 1969. The payments involved are small premiums under industrial life assurance policies and payments under friendly society contracts. A large number of these contractual payments involve an odd ½d and it is necessary to have a statutory provision to prescribe how they are to be adapted to the new situation. Section 16 will enable the Minister for Industry and Commerce to ensure that the total amount payable over a period will be maintained constant in each case.
A second Decimal Currency Bill will be needed later this year to settle other matters of detail. These are matters such as the conversion of bank balances, the effect of the change on hire purchase and other contracts, and the legal tender arrangements during the changeover period beginning on 15 February, 1971. The Decimal Currency Board is at present studying the matters that need to be dealt with in the second Bill, in consultation with the interests concerned.