Golden Bay's Growing Complementary Currency System - Quite Handy
By Charlotte Squire
Golden Bay's complementary currency system - HANDS (How About Non Dollar System) - has done a strange thing. It's survived; in fact it's grown to encompass the highest membership per capita in New Zealand. How did it reach these lofty heights? Why does it remain, when other systems seemed to peak in response to the Rogernomic (Thatcherism/Reaganism) days, then fade away?
HANDS, a subsidiary of the international trading system LETS (Local Energy Trading System), is designed to strengthen local community and social climate. It does this by facilitating the exchange of goods and services amongst the Golden Bay community, using what they call a 'complementary mutual exchange currency'.
The interesting thing about this purpose is its focus upon community cohesion, as opposed to economic growth. At first glance, HANDS seems very similar to the conventional money system. The HANDS dollar is roughly equal to the New Zealand dollar, simular tax requirements are imposed by the New Zealand government (New Zealand's Inland Revenue Department recognises "green dollar type" exchanges as legitimate ways to do business, so both Income and Goods and Services tax must be paid as per usual), and HANDS coupons can be exchanged in one, two, five, ten and twenty HANDS notes. However, on closer inspection, HANDS has some core differences.
Committee member of LETS connect, the New Zealand wide association of LETS exchanges, Christoph Hensch, says: "People need to learn that while the New Zealand Dollar is just a 'thing' - actually mostly a computer blib - in rare cases metal and plastic - a HAND is something fundamentally different. A HAND denotes a relationship between the individual member and the collective of the membership. It's a relationship of either having a commitment/obligation to the community or a right to receive something. Having a right or commitment, expressed in a value, is completely different from being 'rich' or 'poor' - from having lots or little," says Christoph. He says that because of this, the sense of isolation that people tend to experience within the conventional money system, during periods with little or no money, isn't so apparent within HANDS.
Lets wind back to the establishment of HANDS. Beginning in 1989, HANDS grew to its peak in 1994, then dropped slightly and plateaued for five years. Then, in 2003, a new period of growth began when a solid committee was formed. A position of a paid broker for the first time appeared, and a new coupon system stimulated more trading.
These days HANDS has 190 members (plus their partners and families). This is within Golden Bay's population base of 5000. So, nearly four percent of the Bay's population is a signed up member, and factor into this the passive involvement of their loved ones.
So how does HANDS actually work? Introducing Steve du Feu. Steve, a motelier, offers Saunas on HANDS. Members use Steve's sauna, then pay in HANDS. They can do this using a mix of HANDS and money, or one or the other. To pay Steve, members have four choices. They can use a transaction slip (which they sign, then give to Steve to submit), which is then either given to a committee member or put into the HANDS box at the local Wholemeal Café's foyer; they can ring the 'HANDy messenger' with transaction details; they can enter the transaction online; or they can use their HANDS coupons. Steve then generally spends his HANDS on native trees, piano lessons, labour or massage.
The HANDy messenger is a position unique to HANDS. Joanna Piekaski works within this role, she's paid in HANDS to act as a broker to stimulate trading.
"It comes down to keeping in touch with members as much as possible and doing anything possible to strengthen our system and keep the members enthusiastic," says Joanna.
Joanna identified one area where HANDS needs more work.
"As it is now, there's great demand for some offerings and far less for others, so those with high demand offerings are afraid to freely earn, because it's been their experience that they haven't been able to as freely spend. That's where it gets stuck. If members got the momentum going, I think it could be truly amazing."
HANDS is very successful compared to other systems in New Zealand. While four percent might not seem huge, compare it to Christchurch's 0.014 % membership ratio.
Why is HANDS doing so well? Murray Rogers, one of five committee members for HANDS, says that the success is partly due to Golden Bay's social make up. "I think it has a lot to with the attitudes, the philosophy, the alternative life style aspect of a significant portion of the population here." Other key ingredients Murray identifies are a dedicated committee, and the HANDy messenger.
Christoph too, sees Golden Bay's "cohesive, geographically well defined community" as a key to the success of HANDS. He also notes HANDS as one of the "different glues" that bind the community together. He counts the innovativeness of HANDS, and the fact that you can buy food on HANDS as other factor's contributing to the HANDS success story.
HANDS creates some unexpected ripples in Golden Bay. Murray gives the example of a recent vocal workshop, hosted for free by a member at a HANDS market:
"She had eighteen participants, and one of her dreams was that she would start up a singing class. She had so much interest, that she was able to start the class."
Environmentally, HANDS has a sustainable element, in that goods and services aren't shipped out of the Bay, drastically reducing the usual costs of transportation upon the environment, whilst strengthening community.
"Keeping an economy local helps that economy because money isn't leaving that community" says Murray, "It's like, take care of your family first before you try to feed the world."
And the HANDS family have some special quirks. Take, for example, their approach to debt and credit. Unlike the conventional money system, HANDS works best when balances move through zero as often as possible, from credit to debit and vice versa. Credit, has been renamed as 'recognition', and debit is known as 'dedication'. Remaining on either side of zero is discouraged and going into dedication is even encouraged, as this makes the money system work. There is no interest charged either way. It says on the HANDS flier "it is the act of exchange and the resulting satisfaction that creates wealth, not the keeping of high balance".
Another way HANDS is moving forward is through its new coupon system. Introduced in October 2005, local artist, Ngang, illustrated the coupons. As well as illustrating each coupon with a picture relating to Golden Bay's landscape, Ngang dedicated each coupon to a sense, an element and an emotion. The one HAND coupon, for example, has the words: smell, earth and connection written on it, as well as a picture of harvest of food crops. The coupons are currently only used by a handful of members, cutting down on administration for both for the HANDS committee and the HANDy messenger.
Elsewhere, each country has different approaches to complementary currencies. In Australia, LETS is very popular, and one group has issued exchange vouchers. While there are no tax requirements for social arrangements, personal arrangements, pastimes or hobbies, those accepting LETS in a business situation are liable to pay tax as per usual, using the Australian dollar. The LETS community are currently campaigning the government to accept payment in LETS, thus keeping the currency in the local community.
In the UK, there are some LETS systems, however Time Banking is strong and supported by government. Time Banking is a system where by volunteer work is done for time units. These units are then banked, and exchanged in the future for someone else's time. Each hour of time is valued equally, each transaction builds community. Time Banking has been given a benefits disregard by the government. Members of LETS still have to declare their earnings, though some Ministers of Parliament are working to change this position.
In the US, the US government tolerates local currencies. Time Banking is strong here. There are also a range of other complementary currencies in operation, based upon the model of Ithacia Hours.
In Canada, Salt Spring Island Dollar and the Toronto Dollar are well known community currencies. Here many local currencies are considered 'vouchers' and are legal under Canadian law.
So, what does the future hold for HANDS?
"We're continually getting new members. We have a momentum going and I think a lot of that is because of Joanna's position as a very active and creative broker," says Murray.
And so the HANDy messenger has the last words:
"H.A.N.D.S. is a helpful, positive opportunity for our community, and has the potential to be transformational, if members allow themselves to let go into a cooperative HANDS community economy. With a biofuels cooperative happening concurrently, we could really free ourselves to supply one another with many if not most of our needs. HANDS circulate locally; none leave our community. Having a well looked after system like H.A.N.D.S. makes it much easier for anyone with a skill, service, or product to earn HANDS which ideally they can spend on skills, services and products they need."
The future of HANDS looks rosy indeed, it's certainly an innovative approach to trade. Maybe this is the secret of a small, flourishing complementary currency.