Bills Digest no. 82,
PDF version [518KB]
Law and Bills Digest Section
Purpose of the Bill
Structure of the Bill
Senate Standing Committee for the
Scrutiny of Bills
Policy position of non-government
Position of major interest groups
Statement of Compatibility with Human
Key issues and provisions
Date introduced: 16
House: House of
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
When Bills have been passed and have received Royal Assent,
they become Acts, which can be found at the Federal Register of Legislation
All hyperlinks in this Bills Digest are correct as
at March 2017.
Purpose of the Bill
The purpose of the Crimes Amendment (Penalty Unit) Bill
2017 (the Bill) is to amend section 4AA of the Crimes Act 1914 (the
Act) by increasing the amount of the penalty unit from $180 to $210 for
Commonwealth criminal offences.
The Bill also postpones the date at which the penalty unit begins automatically
adjusting in line with the Consumer Price Index (CPI) at three year intervals,
from 1 July 2018 to 1 July 2020.
of the Bill
The Bill comprises one schedule which outlines the two
amendments to the penalty unit provisions of the Act.
The Commonwealth penalty unit was introduced in 1992 as
part of reforms recommended by the 1991 Review of Commonwealth Criminal Law
Penalty units had also been suggested in a 1988 report on sentencing by the Law
The Review, chaired on behalf of the Attorney-General’s Department by the
former Chief Justice of the High Court, Sir Harry Gibbs, concluded that ‘a
system of penalty units be employed in Commonwealth legislation’ such that it
might be efficiently updated ‘by amendment of one Act’.
Fines are calculated by multiplying the amount set as the
penalty unit by the number of units prescribed for offences in different
legislation. For example, the maximum fine for possessing controlled drugs is
400 penalty units which when calculated at the present value of a penalty unit
amounts to $72,000.
Penalty units vary for different offences: letting your cattle trespass on
Commonwealth land is worth only 1 penalty unit, whereas bribing a foreign official
is worth 10,000 penalty units for an individual and 100,000 penalty units for a
Modelled on the system of penalty units implemented first
by Victoria (1981), then Queensland (1985) and New South Wales (1987), the
Commonwealth penalty system was similarly intended to improve the efficiency of
legislation. The penalty unit system has been maintained in all Australian
jurisdictions except South Australia. Table 1 sets out current levels of
penalty units in each Australian jurisdiction. There have been some calls for
greater consistency across Australia so that the financial penalties for
similar offences are more uniform.
It is not easy, however, to make a clear comparison between the amount of
penalty units at the Commonwealth with the states and territories, because they
are formulated with substantially different categories of offences.
Table 1: Australian Penalty Units 2016/7
Source: Parliamentary Library.
As noted in the Review report, the dollar amount specified
in many Commonwealth Acts frequently needed to be individually amended as the
‘erosion of the value of money sooner or later causes the amount specified to
Reflecting the unanimous views of submissions to the Review, the Commonwealth Director
of Public Prosecutions observed that the proposed reforms were ‘eminently
In the second reading speech in support of the Crimes
Legislation Amendment Bill 1992 which introduced Commonwealth penalty unit, Senator
Bob McMullan stated that the usefulness of the change was apparent in the fact
that ‘by simple amendment of one provision, the Parliament can
ensure that the penalties for all Commonwealth offences reflect current
Furthermore, it would ‘not preclude Parliament from using legislation to
reflect the seriousness with which any particular offence is viewed by the
Parliament by altering the number of penalty units prescribed for a particular
This Bill is the latest in a series of
amendments to the law since 1992 intended to increase the amount of money set
as the penalty unit. Table 2 sets out a timeline of previous changes,
the legislative instrument containing the amendment, the year of the change and
a comparative figure in 2016 dollar terms to show the value of the penalty unit
Table 2: summary of changes to penalty unit since 1992
||Crimes Legislation Amendment Act
||Crimes and Other Legislation Amendment Act
||Crimes Legislation Amendment (Serious Drugs, Identity
Crime and Other Measures) Act
||Crimes Legislation Amendment (Penalty Unit) Act
||Crimes Legislation Amendment (Penalty Unit) Bill
Source: Parliamentary Library.
As part of the reforms in 2012, the Government proposed to
standardise the review process by requiring a triennial review at the behest of
the Attorney-General of the penalty unit so that the penalty could be
maintained in real terms.
In a submission to the senate the Australian Crime Commission expressed their
support for regular reviews of the amount of a penalty unit ‘to ensure the
deterrent factor remains high’.
In 2015, this was amended to provide for automatic indexation in line with CPI
rounded to the nearest 50 cents every three years beginning on the 1 July 2018.
The current proposal in this Bill will increase the amount of the penalty and
delay indexation until 1 July 2020.
Standing Committee for the Scrutiny of Bills
The Scrutiny of Bills Committee has reviewed the Bill and
made no comment in the Scrutiny Digest.
position of non-government parties/independents
Both the Australian Labor Party and Coalition while in
Government have introduced and supported Bills to increase the amount of the
There is no publicly articulated opposition to an increase
of the penalty unit by independents and
major interest groups
No public statement has been made about the proposal to
change the penalty units by major interest groups.
The increase in the amount of the penalty unit is expected
to increase the revenue collected by the Commonwealth from financial penalties.
In the Minister’s second reading speech, he stated that the measure was
estimated to boost revenue by $80 million over the next four years.
The Explanatory Memorandum also states: ‘[t]his measure was approved and
announced as part of the 2016-17 Mid-Year Economic and Fiscal Outlook’.
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.
After its most recent amendment in 2015, section 4AA(1) of
the Act specifies the penalty unit as $180. Item 1 proposes to change
the amount stated to $210. This will see an initial increase of $30 to the
penalty unit at 1 July 2017 when the proposed Act is set to commence.
Item 3 clarifies that the penalty rate increase set
out in Item 1 will apply to an offence committed on or after the date of
Changes made in 2015 introduced an automatic indexation of
the penalty unit. This remains in place, but Item 2 postpones the date
at which the penalty unit first adjusts by substituting ‘1 July 2018’ with ‘1
The Bill’s increase in the penalty unit represents an
above average rise to the amount of the penalty unit.
As previously shown in Table 1 above, the real value
of the penalty unit since its introduction in 1992 has been relatively stable:
around $180 in 2016 dollar terms, with each subsequent change maintaining this
value to within a few dollars variance. When the penalty unit system was
introduced, it was anticipated that it would need to be continually reviewed
and amended as needed.
For example, the first increase of the penalty unit from $100 to $110
corresponded with a 9.6 per cent increase in the Consumer Price Index (CPI).
The increase in 2015 consistently followed this historical practice, but this
increase pushes the value of the penalty unit higher than the historic average.
It has been stated by the Minister that this increase will
‘strengthen courts’ ability to impose appropriate punishments on serious
As well as acting as a strong deterrent, the change is also expected to boost
revenue by $80 million over the forward estimates.
In 2015, subsection 4AA(1A) was amended 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 was removed on the
basis that such a review was no longer required with the introduction of
automatic indexation, based on the CPI.
Speaking on the indexation measures introduced in 2015 Michael
Keenan, the Minister for Justice, stated:
By instituting an automatic indexation
process, the bill provides an efficient mechanism for maintaining the penalty
unit value into the future while still ensuring that value is made clear for
members of the public, enforcing agencies.
The reason for delaying the automatic indexation of the
penalty unit in this Bill is not expressly stated in the Explanatory Memorandum
or in the Minister’s second reading speech. The intention of the Bill is
justified on the grounds that strong penalties have a deterrent effect, and
that an increase to penalty units will boost revenue.
Together with the higher than average increase to the
value of the penalty unit, this change indicates that the increase to the
penalty unit is a conscious policy decision rather than a routine maintenance
of the penalty unit value as this was already provided for in 2015 with the
introduction of the automatic indexation mechanism set to commence in 2018.
. Crimes Act 1914.
Department (AGD), Review of Commonwealth criminal law: fifth interim report,
Law Reform Commission, Sentencing, Report, 44, Canberra, 1988, pp. 59, 62.
Review, op. cit.
. Crimes Act 1914,
Act 1914, section 90; Criminal Code 1995, section 70.2.
is a penalty unit? Is the current system unfair?’, NSW Courts (Sydney
Criminal Lawyers) website, 12 May 2015.
penalty unit for an individual is $150 and $750 for a corporation. At the
Commonwealth level, section
4B(3) of the Crimes Act 1914 states that the court may when it
thinks fit in the circumstances and where the Act does not provide otherwise,
multiply the pecuniary units imposed on a body corporate by a factor of five
times the amount of the penalty that could be imposed on a natural person.
Review, op. cit.
submission quoted in AGD, Review of Commonwealth criminal law: fifth interim
report, Canberra, June 1991, p. 194.
. Crimes Legislation
Amendment Act 1992 (Cth); B McMullan, ‘Second reading speech:
Crimes Legislation Amendment Bill 1992’, Senate, Debates, 16 September 1992,
in $2016 dollar terms have been calculated with the aid of the Reserve Bank of Australia
‘inflation calculator’ which
Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Bill 2012,
Bills digest, 46, 2012–13, Parliamentary Library, Canberra, 2011.
Crime Commission (ACC), Submission
to the Senate Standing Committee on Legal and Constitutional Affairs, Crimes
Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Bill
2012, submission no. 3, 6 November 2012, p. 3.
. Crimes Legislation
Amendment (Penalty Unit) Act 2015 (Cth).
Keenan, ‘Second reading speech:
Crimes Amendment (Penalty Unit) Bill 2017’, House of Representatives, Debates,
16 February 2017, p. 11.
Memorandum, Crimes Amendment (Penalty Unit) Bill 2017, p. 5; S
Morrison (Treasurer) and M Cormann (Minister for Finance), Mid-year
economic and fiscal outlook 2016–17, p. 105.
Statement of Compatibility with Human Rights can be found at page 3 of the
Explanatory Memorandum to the Bill.
McMullan, ‘Second reading speech’, op. cit.
and Other Legislation Amendment Bill 1996, Bills digest, 101, 1996–97,
Department of the Parliamentary Library, Canberra, 1996.
Keenan, ‘Second reading speech’, op. cit.
Keenan, ‘Second reading speech:
Crimes Legislation Amendment (Penalty Unit) Bill 2015’, House of
Representatives, Debates, 15 June 2015, p. 6155.
For copyright reasons some linked items are only available to members of Parliament.
© Commonwealth of Australia
With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.
In essence, you are free to copy and communicate this work in its current form for all non-commercial purposes, as long as you attribute the work to the author and abide by the other licence terms. The work cannot be adapted or modified in any way. Content from this publication should be attributed in the following way: Author(s), Title of publication, Series Name and No, Publisher, Date.
To the extent that copyright subsists in third party quotes it remains with the original owner and permission may be required to reuse the material.
Inquiries regarding the licence and any use of the publication are welcome to firstname.lastname@example.org.
Disclaimer: Bills Digests are prepared to support the work of the Australian Parliament. They are produced under time and resource constraints and aim to be available in time for debate in the Chambers. The views expressed in Bills Digests do not reflect an official position of the Australian Parliamentary Library, nor do they constitute professional legal opinion. Bills Digests reflect the relevant legislation as introduced and do not canvass subsequent amendments or developments. Other sources should be consulted to determine the official status of the Bill.
Any concerns or complaints should be directed to the Parliamentary Librarian. Parliamentary Library staff are available to discuss the contents of publications with Senators and Members and their staff. To access this service, clients may contact the author or the Library‘s Central Enquiry Point for referral.