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Monday, March 31, 2008

Pat Martin wants to kill the Penny

Is it time for the Penny to leave circulation? Pat Martin thinks so and will propose a private members bill to do just that.

Personally I think it's sad that we have to discard the penny because of mismanagement and gross monetary inflation that has devalued our smallest coin(s) so that they have no real value. Was the move to Loonies and Toonies so much about durability or was it more about moving them from folding money to loose change catagory preparing us for the day they would need to kill the penny and probably the nickel some short time later?

That said I'd love a 5 or 10 dollar coin as long as they put some silver in it so it would not devalue as readily as mere paper money or base metal coins have.

MP says penny makes no sense
By: Mia Rabson

Updated: March 31, 2008 at 06:19 AM CDT

OTTAWA -- NDP MP Pat Martin doesn't want a penny for your thoughts.

In fact, he doesn't want a penny at all.

The Winnipeg Centre MP will introduce a private members' bill when Parliament returns from its Easter break today that would eliminate the penny from circulation in Canada.

"It's a completely vacuous thing to hold on to," Martin said.

The Royal Canadian Mint contends it costs less than a cent to make a penny, but Martin said Library of Parliament research suggests it is as much as four cents per penny.

He said take that, together with the fact that on its own an individual penny is useless, means the penny has outlived any reason for being in Canada.

Most pennies end up in jars or under couch cushions because people don't want to use them and carrying them around is a nuisance, Martin added.

"I don't know who (the Mint is) trying to please by hanging on to it," Martin said.

The Mint has engaged repeated public opinion studies on the subject of getting rid of the penny. The most recent, released last fall, suggests 63 per cent of small retailers and 42 per cent of consumers are in favour of getting rid of the penny.

Nineteen per cent of small retailers and 33 per cent of consumers are against it, while the remainder are indifferent.

Charities are in favour of removing the penny because it would help avoid the costs associated with collecting donations of pennies, but large retailers are against the idea over fears it would limit how they could price their products.

One third of consumers who were against the idea feared it would result in prices going up as retailers would round up prices to the closest five cent mark.

Martin's legislation would require retailers on cash transactions to round final totals up or down to the nearest five or 10-cent mark. One and two cents would be rounded down to the closest 10 cent, while three and four cents would go up to the next five cents. Six or seven cents would go down to the five-cent mark and eight or nine cents would go up to the 10.

Debit and credit card transactions would not be rounded. And the legislation doesn't prevent any store from setting whatever price it wants for a product, Martin added.

"You can still price something at $9.97 if you want," he said.

The rounding would be applied only on a customer's total bill, not on individual items.

Martin said a study of the experiences in other countries that eliminated pennies found that kind of regimen was revenue neutral for retailers and cost neutral for consumers.

New Zealand and Australia have both eliminated the penny.

"Life as they knew it didn't end," Martin said.

New Zealand also eliminated its five-cent piece.

"Our currency has evolved," he said. "We have to mature with it."

Martin said the best evidence of the low value of pennies is the fact that many retailers keep a small dish of them at the till in case a customer needs one to make exact change.

"You don't see a dish of free loonies," Martin joked.

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Mé said...

We'll all have personal deb(i)t cards to do our financial transactions. Afterwards, we'll all be microchipped based on our financial worth. Major League Baseball will determine where we are making our purchases and submit subliminal messages to our brains to purchase products and services endorsed by MLB.

That's a penny for my thoughts.

Jafo said...

I've a better idea. Let's get rid of Pat Martin and keep the penny. We all know that if the penny goes, prices will end up rounded off to the higher number.