Australia: What is a Penalty Unit?

• The value of a penalty unit may differ in each jurisdiction and may also differ for corporations and individuals.

Many Acts create offences and then impose penalties for those offences. These penalties are often expressed in terms of penalty units. But what is a penalty unit and how do they work?

A penalty unit is a mechanism by which Parliament can escalate penalties across a range of legislation by amending a single piece of legislation rather than every single Act which sets out a penalty.

Each Australian jurisdiction has introduced the concept of a penalty unit into its legal frameworks. Generally, states have a monetary value for their penalty units set out in a primary piece of legislation relating to penalties, but there might be different, specific, amounts in other legislation. A summary of the current values of penalty units in each Australian jurisdiction is set out below:

Under Commonwealth law, a penalty unit is $110 unless a law says otherwise.

In Queensland, a penalty unit generally is $75. For a particular offence, an Act may prescribe a different penalty for individuals and for corporations. However if no separate penalty is expressed for the commission of the offence by a corporation, the value of the penalty unit for the corporation in respect of that offence will be five times the amount imposed on an individual, ie. $375.

In New South Wales, the current value of a penalty unit is $110.

Victoria fixes the value every financial year. The value of a penalty unit for 2006/07 is $107.43

Western Australia sets a different value for penalty units depending on the legislation. For road offences it's as low as $50, but it can be as high as $110.

Under South Australia's Corporations (Ancillary Provisions) Act 2001, a penalty unit is $100; likewise, in Tasmania the value is $100.

The ACT distinguishes between individuals and corporations. For individuals, the penalty unit's value is $100, but this jumps to $500 if the person charged is a corporation.

Finally, the Northern Territory currently sets the value of a penalty unit at $110.

Penalties are sometimes expressed in terms of imprisonment instead of a financial penalty. For example, if the offence only provides for a penalty of imprisonment and the offence is committed by a corporation, the Penalties and Sentences Act 1992 (Qld) provides for a financial penalty (expressed in penalty units) to be imposed on the corporation in lieu of imprisonment. It should be noted that if an officer of the corporation committed the offence, that officer may be liable for imprisonment in their personal capacity.

When making any assessments based on penalty units, there are two key issues to keep in mind.

First, as penalty units vary in each jurisdiction, when identifying the value of a penalty unit, it is important to first identify the jurisdiction in which the penalty unit is based and to determine the value of the penalty unit in that jurisdiction.

Second, it is important to recognise that while each jurisdiction generally has a standard value for a penalty unit, in some circumstances the value of the penalty unit is not the standard rate. For example, certain pieces of legislation have different values for penalty unit and different values for penalty units can sometimes apply to corporations.

By ensuring that these issues are considered when making an assessment based on penalty units, underpayment or overpayment of penalties can be avoided.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.