Crimes Amendment (Penalty Unit) Bill 2022 [2022] AUSStaCSBSD 115 (30 November 2022)

• Chapter 1
• Initial scrutiny
• Crimes Amendment (Penalty Unit) Bill 2022
• Significant penalties1

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Chapter 1

Initial scrutiny

1.1 The committee comments on the following bills and, in some instances, seeks a response or further information from the relevant minister.

Crimes Amendment (Penalty Unit) Bill 2022

Purpose	This bill seeks to amend the Crimes Act 1914 to increase the amount of the Commonwealth penalty unit from $222 to $275, with effect from 1 January 2023.
Portfolio	Attorney-General
Introduced	House of Representatives on 9 November 2022

Significant penalties^[1]

1.2 Item 1 of Schedule 1 to the bill seeks to amend the definition of 'penalty unity' in subsection 4AA(1) of the Crimes Act 1914 (Crimes Act) to increase the amount of a single unit from $222 to $275. Commonwealth pecuniary criminal and civil penalty provisions are generally expressed in terms of penalty units, with the penalty amount calculated by multiplying the value of a penalty unit as prescribed by the Crimes Act by the number of penalty units applicable.^[2] The effect of this amendment would therefore be to increase the maximum civil and criminal penalties that apply across the majority of Commonwealth legislation.

1.3 The amendment would take effect from 1 January 2023.

1.4 Commonwealth penalty unit amounts typically increase according to an indexation process, which sees amounts automatically increase every three years in line with the consumer price index. The previous automatic increase occurred on 1 July 2020 and raised the amount of a single penalty unit from $210 to $222, approximately 6 per cent. The increase proposed by this bill would occur alongside the usual indexation process, with the indexation process scheduled to continue from 1 July 2023.^[3]

1.5 The increase proposed by this bill is significant, representing an increase of almost 24 per cent. This would mean, for example, that the maximum pecuniary penalty that could be imposed under section 32 of the Export Control Act 2020 for exporting prohibited goods would be increased from $444,000 to $550,000.^[4] The committee expects that any significant penalty will be justified within the explanatory materials for the bill. Scrutiny concerns are heightened in this case given that the amendment introduced by this bill would apply across the majority of Commonwealth civil and criminal penalty provisions. In this instance, the explanatory memorandum merely notes that:

... maintaining the value of the penalty unit over time is necessary to ensure that financial penalties for Commonwealth offences reflect community expectations and continue to remain effective in deterring unlawful behaviour.^[5]

1.6 In his second reading speech, the Attorney‑General noted that 'this measure is estimated to result in increased revenue to the Commonwealth of $31.6 million over the next four years, which will support the government's budget repair efforts'.^[6]

1.7 The committee is concerned that the Parliament is being asked to approve a wholesale increase to all civil and criminal penalties contained within Commonwealth legislation that are expressed in penalty units with very limited justification as to why this significant increase is necessary or appropriate. For example, the committee notes that the explanatory materials to the bill do not explain how the amount of the increase was determined, or why it is considered necessary to introduce an increase to the Commonwealth penalty unit of approximately 24 per cent in addition to the usual indexation process. The explanatory memorandum also contains no evidence that the proposed increase better reflects community expectations or is necessary to ensure that penalties remain an effective deterrence measure.

1.8 The committee therefore requests the Attorney-General's advice as to why it is both necessary and appropriate to increase the amount of a Commonwealth penalty unit by almost 24 percent, noting the limited explanation provided in the explanatory materials for the increase and that the increase will apply in addition to the usual indexation process.

1.9 In light of the committee's significant scrutiny concerns, the committee considers that it would have been appropriate to afford the committee more time to review the bill before passage of the bill through the Parliament.

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[1] Schedule 1, item 1. The committee draws senators' attention to this provision pursuant to Senate Standing Order 24(1)(a)(i).

[2] However, it is sometimes appropriate to express a penalty in individual dollar amounts, see Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp. 42–43.

[3] Explanatory memorandum, p. 5.

[4] The maximum penalty that may be imposed under section 32 of the Export Control Act 2020 is 10 years' imprisonment, 2000 penalty units, or both.

[5] Explanatory memorandum, p. 5.

[6] The Hon Mark Dreyfus KC MP, second reading speech, 9 November 2022.