Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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66. To ask the Minister for Finance his view on abolishing one and two cent coins. [23960/13]

Michael Noonan (Limerick City, Fine Gael)
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In 2011, I requested that the Central Bank examine ways to improve Ireland's payment infrastructure. The Central Bank established a Steering Committee which prepared and submitted the National Payments Plan to me. The membership of the Steering Group was to act as representatives for all sections in society, including marginalised and disadvantaged groups. Government subsequently approved the plan in April 2013.

The National Payments Plan will target improving consumer payments systems, modernising business payments, promoting electronic payment methods, reducing costly cheque usage, increasing the efficiency of the use of cash and ensuring that Ireland meets its commitments under the Single European Payments Area Regulation. The National Payments Plan outlines that if Ireland were to match best practice in Europe, savings of up to €1 billion per annum could be made to the economy. This would result in better value for the customer, lower back-office administration cost for Government, lower administration cost for business and lower operating costs for financial institutions.

On the specific query that the Deputy has raised, the National Payments Plan has made a recommendation surrounding the use of one and two cent coins in Ireland. There is evidence that one and two cent coins are not actively used by consumers. It is expensive to continually mint and re-issue new coins. The National Payments Plan does not envisage that one and two cent coins would be abandoned; they would remain legal tender.

The Steering Committee intends to trial the use of a rounding convention in a pilot project in a mid-size Irish town. The rounding convention is entirely voluntary on the part of both consumers and retailers. This rounding convention operates successfully in other jursidictions inside and outside the EU e.g. the Netherlands, Finland, Australia and New Zealand. The pilot is expected to run in August/September of 2013 and to finish by November 2013. The report on the basis of the pilot project will be submitted to and reviewed by the Steering Committee, which will subsequently report to Government through my Department. An appropriate Government decision informed by that report will follow.

A change in the legal tender status of these coins requires action at EU level. Consideration of this issue is currently ongoing at EU level. On 14 May the Commission issued a communication to the European Parliament and Council relating to the continued issuance of the one and two cent coins.