Written answers

Wednesday, 24 June 2015

Department of Finance

Currency Circulation

Photo of Ruth CoppingerRuth Coppinger (Dublin West, Socialist Party)
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85. To ask the Minister for Finance his plans for the phasing out of one cent and two cent coins. [25228/15]

Photo of Ruth CoppingerRuth Coppinger (Dublin West, Socialist Party)
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86. To ask the Minister for Finance if there are implications for the validity of existing one and two cent coins, and coins entering the State from other eurozone countries; his views on the handling of one and two cent coins that enter circulation here, following the phasing out of the coins; and if he will make a statement on the matter. [25229/15]

Photo of Ruth CoppingerRuth Coppinger (Dublin West, Socialist Party)
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87. To ask the Minister for Finance his plans for the monitoring of prices when one and two cent coins are phased out for cash transactions. [25230/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 85 to 87, inclusive, together.

One of the recommendations of the National Payments Plan was to conduct a rounding trial in a mid-sized Irish town to test consumer and retailer reaction to the concept of rounding. The motivation for rounding is to reduce the need for 1 and 2 cent coins, making transactions more convenient for customers and retailers alike. The impetus to reduce use of 1 and 2 cent coins by rounding total bills to the nearest 5 cent at the till arises from:

-The reluctance of consumers to use 1 and 2 cent coinsthese coins tend to be lost or hoarded

-The related cost/inconvenience to retailers of dealing with these coins

-The disproportionate cost to the Central Bank to produce new 1 and 2 cent coins for circulation

The Wexford Rounding Trial was subsequently run from 16 September to 17 November 2013, and showed strong support for rounding both from consumers and retailers. During the Trial retailers rounded cash transactions to the nearest 5 cent at the cash register, removing the need for 1 and 2 cent coins in change. When don't knows are excluded, 85% of consumers and 100% of retailers surveyed after the Trial believed rounding should be applied nationally.

The Government has now asked the Central Bank to rollout rounding nationally. This will be done on the following basis:

-Rounding will be to the nearest 5c, and apply only to total bills, not individual items;

-It will be introduced on a voluntary basis for both retailers and consumers;

-Retailers will be given adequate time to prepare for the implementation of rounding;

-A national information campaign to support the rollout will be conducted by the Central Bank, aimed at both consumers and retailers;

-1 cent and 2 cent coins will retain their status of legal tender. The Central Bank will continue to issue 1 and 2 cent coins to meet demand;

As such, 1 cent and 2 cent coins will not be withdrawn from circulation, though the volumes used are expected to decline significantly. The fact that these coins will also continue to enter the system from abroad (e.g. through spending by tourists) will not create any difficulty. However it will be important that the Central Bank, in communicating to consumers about rounding, also ensure that tourists are adequately informed.  As rounding only applies to the final bill, not to individual items, it is not expected that rounding will have any impact on prices. However, the Central Bank will also be asked to track prices as part of the rollout.

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