Buying local with local dollars
The concept of a Christchurch Dollar that can be spent on goods and services in Canterbury is an interesting and attractive idea, but would need considerable buy-in from local businesses and communities to make it work. The Christchurch Dollar is being considered by Te Hononga Council-Papatipu Runanga Committee, which partners the Christchurch City Council with six tribal runanga within the city boundaries.
City councillor Raf Manji, who is working on the idea with Te Hononga, says a Christchurch Dollar would help boost the local economy, by increasing economic activity and reducing the ‘‘leakage’’ of money out of the region.
Essentially, it can be seen as another way of encouraging people to support local businesses and strengthen community connections.
The model for the Christchurch Dollar is the Bristol Pound, introduced in 2012 and used within the English city of Bristol and its surrounding areas. The Bristol Pound exists both as a printed currency and in an electronic form which can be exchanged through internet and mobile phone apps.
Local or community currencies are not a new idea, even in New Zealand. ‘‘Green dollar’’ networks have operated for more than 25 years. They are essentially a barter system, where members earn and spend ‘‘green dollars’’ or credits by doing things for each other. The Lyttelton Timebank operates on a similar basis.
The proposed Christchurch Dollar would operate at a considerably higher level, requiring the involvement and oversight of the Reserve Bank and regulatory agencies. This regulation would be necessary to ensure the system’s proper functioning.
If it follows the Bristol Pound model, the Christchurch Dollar would be operated by a registered bank or building society, and would be anchored on the official currency. Unlike ‘‘green dollar’’ systems where currency is created by performing tasks, Bristol Pounds are created by depositing pounds Sterling into the Bristol Credit Union, and can be converted back to the official currency by making withdrawals from accounts at that bank.
This places the Bristol Pound under the umbrella of banking and securities regulations. Because the Bristol Pound is directly linked to Sterling, people using it also cannot escape their tax liabilities. Expect traders using a properly-instituted Christchurch Dollar to charge you GST.
There are two important things that need to be considered by those looking into whether a Christchurch Dollar is feasible.
The first is that the running the system will not necessarily be cheap or easy. The Bristol Pound network is partly supported by community donations; ironically it invites people to make these in Sterling. Setting up a proper system of exchange, with its associated printed money, bank accounts, websites and even ATM machines, will all have to be funded from somewhere.
The second is that Christchurch Dollars will not necessarily be treated as legal tender. Businesses will opt in to using them. There is no guarantee that any trader will accept the Christchurch Dollars in your wallet or purse. The Bristol Pound scheme maintains a directory of where the local currency can be spent.
Local currency works in Bristol because it is a reasonably large city, about the same size as Christchurch, and local people and businesses seem enthusiastic about it. A Christchurch Dollar would need the same level of community commitment.