BILLS DIGEST NO. 126, 2014–15              18 June 2015

Crimes Legislation Amendment (Penalty Unit) Bill 2015

Joshua Wrest
Law and Bills Digest Section 

Date introduced: 27 May 2015

House:  House of Representatives

Portfolio: Attorney-General

Commencement:  Sections 1 to 3 commence on Royal Assent. Schedule 1 will commence on 31 July 2015.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website.

Purpose of the Bill

The purpose of the Crimes Legislation Amendment (Penalty Unit) Bill 2015 (the Bill) is to amend the Crimes Act 1914 (the Act)[1] by increasing the amount of the penalty unit for Commonwealth criminal offences and allowing for the penalty unit amount to be automatically adjusted with inflation every three years.

Structure of the Bill

The Bill contains one schedule which amends the provision that sets out the Commonwealth penalty unit.

Background

The Bill is the latest in a series of legislative changes to the Commonwealth’s penalty unit for criminal offences.

The Crimes Legislation Amendment Act 1992 first introduced the Commonwealth penalty unit.[2] The introduction of a penalty unit was based on the recommendations from the Review of Commonwealth Criminal Law (the Review) in 1991. [3] The Review recommended that Commonwealth penalties which utilised a dollar amount be replaced with a penalty unit system in relation to fines, as ‘the erosion of the value of money sooner or later causes the amount specified to be unrealistic’.[4] At that time, Victoria, New South Wales and Queensland had already implemented a penalty unit system.[5] The penalty unit was initially set at $100.[6]

The first increase to the amount of the penalty unit after its introduction occurred with the passing of the Crimes and Other Legislation Amendment Act 1997.[7] This Act amended the penalty unit amount from $100 to $110. The increase corresponded with the Consumer Price Index (CPI) increase of 9.6 per cent from June 1992 to September 1995.[8]

In 2012, the Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012 increased the penalty unit from $110 to $170.[9] This adjustment to the Act also introduced a regular review of the penalty unit every three years to accommodate changes to the CPI.[10] At the time of the Bill’s introduction, it was estimated that the $60 increase would generate an additional $185.0 million in consolidated revenue for the Commonwealth over the forward estimates period.[11]

The amendment proposed in the Bill will implement a budget measure that seeks to increase the Commonwealth penalty unit from $170 to $180. The Government has stated that the $10 increase is ‘broadly consistent with inflation since the value was last adjusted in December 2012’.[12] The budget measure also indicated ‘that the Government will also introduce ongoing automatic indexation of the penalty unit value based on the CPI. Indexation will occur on 1 July every three years’.[13] The Australian Bureau of Statistics releases the CPI figures in catalogue 6401.0, every March, June, September and December.[14]

Ongoing automatic indexation will mean that the Government will no longer be required to introduce legislative amendments to increase the penalty unit and is intended to ensure that monetary penalties in Commonwealth legislation and territory ordinances[15] ‘keep pace with inflation and continue to remain effective in deterring unlawful behaviour’.[16] While the triennial increase of the penalty unit amount will occur automatically, the Minister will be required, under proposed subsection 4AA(1A) of the Crimes Act (at item 3 of the Bill) to publish the revised amount, by notifiable instrument. (‘Notifiable instruments’ are provided for under the Acts and Instruments (Framework Reform) Act 2015.[17] These instruments are not subject to parliamentary scrutiny or sunsetting.[18]) The first indexation proposed under this Bill will occur on 1 July 2018 (proposed subsection 4AA(3) of the Crimes Act).

The Government estimates that these amendments will generate an additional $45 million to consolidated revenue over the next four years, from 2015–16 to 2018–19.[19] The Government also argues that this increase to the penalty unit will be ‘an effective deterrent to criminal activity’, including white-collar crime and serious and organised crime.[20]

Committee consideration

Senate Standing Committee for the Scrutiny of Bills

As at the date of writing, the Scrutiny of Bills Committee had no comment on this Bill.[21]

Policy position of non-government parties/independents

Both the Coalition and the Australian Labor Party have previously introduced and supported legislation to increase the amount of the penalty unit in the Crimes Act 1914.

The other non-government parties and the independents have not publically articulated their position on any changes to the penalty unit.

Position of major interest groups

The Australian Crime Commission, in its submission to the Senate Legal and Constitutional Affairs Committee’s inquiry into the Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Bill 2012, supported the three-yearly review of the amount of a penalty unit introduced by that Bill ‘as a prudent practice to ensure the deterrent factor remains high’.[22]

Financial implications

The Explanatory Memorandum states that ‘the Bill will increase the revenue returned to the Consolidation Revenue Fund for pecuniary penalties for the commission of Commonwealth criminal offences’.[23] This measure is estimated to generate $45.0 million in additional revenue over the forward estimates period.[24]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[25]

As at the date of writing, the Parliamentary Joint Committee on Human Rights had not commented on the Bill.

Key issues and provisions

Items 1 and 2 propose to amend two definitions. Item 1 repeals and replaces the definition of quarter in subsection 3(1) of the Act, to provide that it means ‘a period of three months ending on 31 March, 30 June, 30 September or 31 December’; whereas the previous definition listed 31 January, 30 April, 31 July and 31 October as the ending periods.[26] The term ‘quarter’ is used to calculate the automatic triennial adjustment to the penalty unit amount.

Item 2 repeals and replaces subsection 4AA(1) of the Act to change the definition of a penalty unit. Under proposed subsection 4AA(1), penalty unit will mean ‘the amount of $180 (subject to indexation under subsection (3))’.

Item 3 repeals and replaces subsection 4AA(1A) in order to remove the requirement for the Attorney-General to review the amount of the penalty unit every three years after the date it was last reviewed. This review will no longer be required with the introduction of automatic indexation based on inflation. Proposed subsection 4AA(1A) will require the Minister ‘to publish the new penalty unit amount by notifiable instrument after it is indexed’.[27] The notifiable instrument will ensure that the new penalty unit amount is specified for members of the public, enforcing agencies and courts,[28] but is not subject to parliamentary scrutiny or sunsetting processes.[29] This proposed subsection will also specify that if the Minister fails to publish the amount of the penalty unit, it does not invalidate the indexation of the unit.

Item 4 inserts proposed subsections 4AA(3)-(8). These proposed subsections will enable automatic indexation of the penalty unit every three years. They also provide the technical details of how the indexation is calculated.

Item 5 refers to item 2 (the penalty unit definition) and ensures that the new penalty unit will apply to offences committed on or after the commencement of this item (31 July 2015).

Concluding comments

This Bill will increase the penalty unit amount for Commonwealth criminal offences, and provide for automatic indexation in line with inflation every three years.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

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[1].              Crimes Act 1914, accessed 12 June 2015.

[2].              Crimes Legislation Amendment Act 1992, accessed 18 June 2015.

[3].              Attorney-General’s Department, Review of Commonwealth Criminal Law: fifth interim report, June 1991.

[4].              Ibid., p. 193.

[5].              Ibid.

[6].              Crimes Legislation Amendment Act 1992, item 19; Department of the Parliamentary Library, Crimes Legislation Amendment Bill 1992, Bills digest, Parliamentary Library, Canberra, 28 September 1992, p. 3, accessed 18 June 2015.

[7].              Crimes and Other Legislation Amendment Act 1997, accessed 18 June 2015.

[8].              MA Neilsen, Crimes and Other Legislation Amendment Bill 1996, Bills digest, 101, 1996–97, Parliamentary Library, Canberra, 1996, accessed 18 June 2015.

[9].              Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012, accessed 18 June 2015.

[10].              Part 2 of Schedule 3 of the Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012; Senate Standing Legal and Constitutional Affairs Committee, Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Bill 2012 [Provisions], report, The Senate, Canberra, November 2012, p. 6, accessed 18 June 2015.

[11].              M Biddington, Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Bill 2012, Bills digest, 46, 2012–13, Parliamentary Library, Canberra, 2012, p. 6, accessed 18 June 2015.

[12].              Australian Government, Budget measures: budget paper no. 2: 2015–16, p. 8, accessed 18 June 2015.

[13].              Ibid.

[14].              Australian Bureau of Statistics (ABS), Consumer price index, Australia, March 2015, cat. no. 6401.0, ABS, Canberra, 22 April 2015, accessed 16 June 2015.

[15].              Penalty units apply to both offences under Commonwealth law and under Territory Ordinances. Subsection 4AA(2) of the Crimes Act 1914 defines a Territory Ordinance as an ordinance that: (a) was made under an Act for the acceptance, administration or government of a territory other than the territory of Norfolk Island; and (b) has not become an enactment of the Australian Capital Territory. As defined under section 3, a territory does not include the Northern Territory.

[16].              Explanatory Memorandum, Crimes Legislation Amendment (Penalty Unit) Bill 2015, p. 5, accessed 18 June 2015.

[17].              Acts and Instruments (Framework Reform) Act 2015, accessed 12 June 2015.

[18].              Explanatory Memorandum, Acts and Instruments (Framework Reform) Bill 2014, p. 29, accessed 18 June 2015.

[19].              Australian Government, Budget measures: budget paper no. 2: 2015–16, p. 8, accessed 18 June 2015.

[20].              M Keenan, ‘Second reading speech: Crimes Legislation Amendment (Penalty Unit) Bill 2015’, House of Representatives, Debates, 15 June 2015, p. 102, accessed 18 June 2015.

[21].              Senate Standing Committee for the Scrutiny of Bills, Alert Digest No. 6 of 2015, The Senate, Canberra, 17 June 2015, p. 17, accessed 18 June 2015.

[22].              Australian Crime Commission (ACC), Submission to the Senate Standing Legal and Constitutional Affairs Committee, Inquiry into the Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Bill 2012, 6 November 2012, p. 3, accessed 18 June 2015.

[23].              Explanatory Memorandum, Crimes Legislation Amendment (Penalty Unit) Bill 2015, op. cit., p. 2.

[24].              Australian Government, Budget measures: budget paper no. 2: 2015–16, op. cit., p. 8.

[25].              The Statement of Compatibility with Human Rights can be found at page 3 of the Explanatory Memorandum to the Bill.

[26].              Crimes Act 1914, accessed 28 May 2015.

[27].              Explanatory Memorandum, Crimes Legislation Amendment (Penalty Unit) Bill 2015, op. cit., p. 6.

[28].              Ibid.

[29].              Explanatory Memorandum, Acts and Instruments (Framework Reform) Bill 2014, p. 29, accessed 18 June 2015.