Explanatory Memorandum
(Circulated by authority of the Attorney-General, the Hon Mark Dreyfus KC MP)GENERAL OUTLINE
1. This Bill amends the Crimes Act 1914.
2. It increases the amount of the Commonwealth penalty unit from $222 to $275, with effect from 1 January 2023.
FINANCIAL IMPACT
3. The Bill will increase the revenue returned to the Consolidated Revenue Fund for pecuniary penalties imposed for the commission of Commonwealth criminal offences.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Crimes Amendment (Penalty Unit) Bill 2022
4. This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Bill
5. The Bill amends the Crimes Act 1914 to increase the value of the penalty unit for Commonwealth criminal offences from $222 to $275, indexed every three years to the Consumer Price Index (CPI).
6. The increase to the penalty unit value will only apply to offences committed on or after 1 January 2023. The amendment to the value of the penalty unit will not impact on current proceedings for Commonwealth offences.
Human rights implications
7. The Bill does not engage any of the applicable rights or freedoms.
8. Penalty units only apply where a person or company has committed a Commonwealth offence.
9. Increasing the value of a penalty unit will increase the maximum fine or financial penalty prescribed by legislation for a relevant offence. However, it does not alter the obligation on a sentencing judge to apply the most appropriate fine or financial penalty in all the circumstances.
Conclusion
10. The penalty unit measures in the Bill are compatible with the human rights and freedoms recognised or declared in the international instruments listed in the definition of human rights in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Notes on Clauses
Preliminary
Clause 1 - Short title
1. This clause provides for the short title of the Act to be the Crimes Amendment (Penalty Unit) Act 2022.
Clause 2 - Commencement
2. This clause provides that the Act will commence on 1 January 2023.
Clause 3 - Schedules
3. This is a formal clause that enables the Schedule to amend Acts by including amendments under the title of the relevant Act.
Schedule 1 - Amendments
GENERAL OUTLINE
The purpose of Schedule 1 is to make amendments to the Crimes Act 1914 relating to the Commonwealth penalty unit.
These amendments increase the Commonwealth penalty unit amount from $222 to $275. This measure was approved and announced as part of the 2022 October Budget.
Penalty units are used to describe the amount payable for monetary penalties imposed for criminal offences in Commonwealth legislation and Territory ordinances. Commonwealth penalties are generally expressed in terms of penalty units rather than specific values to assist with the adjustment of penalties across Commonwealth legislation.
The penalty unit mechanism allows for the maximum monetary penalty for all offences under Commonwealth law, including Territory ordinances, to be automatically adjusted with a single amendment to section 4AA of the Crimes Act. This removes the need for multiple legislative amendments and ensures that monetary penalties in Commonwealth legislation and Territory ordinances remain comparable.
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.
When the penalty unit was introduced in 1992, its value was set at $100. This value was adjusted to $110 in 1997, $170 in 2012, $180 in 2015, and $210 in 2017. In 2015, the Crimes Act was amended to introduce an indexation mechanism to automatically increase the value of the penalty unit every three years in line with CPI. An indexation occurred on 1 July 2020 when the penalty unit increased to $222.
The Bill will also ensure the three yearly indexation cycle continues from 1 July 2023.
Crimes Act 1914
Item 1 - Subsection 4AA(1) (definition of penalty unit)
Subsection 4AA(1) of the Crimes Act specifies the monetary value of a penalty unit at any particular time. Currently, subsection 4AA(1) defines 'penalty unit' as $210. This item provides that the new definition of 'penalty unit' is $275.
Item 2 - Subsection 4AA(3)
Subsection 4AA(3) provides for the indexation of the penalty unit. Currently, subsection 4AA(3) notes the indexation day is 1 July 2020 and each third 1 July following that day. This item omits '2020' and substitutes '2023' to ensure that the three year indexation cycle continues unaffected from 1 July 2023. The amendment is required to give certainty that the new penalty unit amount is not required to be indexed upon commencement.
Item 3 - Application of item 1
This item provides that the amendment made by item 1 applies in relation to an offence committed on or after the commencement of this item. This will ensure that the increased value of the penalty unit to $275 will apply only to offences committed on or after the Schedule commences on 1 January 2023.