The false economy of fining the poor

The signs are everywhere: if you speed on the roads, you'll be fined. If you overstay your parking meter, you'll be fined. If you can't show a valid ticket on the train, you'll be fined. And if you fail to notify Centrelink of your changed circumstances, you'll be fined.

In each case, the purpose of the fine is to reduce your wealth. That is the threat and the punishment. However, the flaw in this system is that it does not treat everyone equally because it does not take into consideration the relative wealth of the person being penalised.

If Office Manager Margaret gets an $85 parking ticket on her car, that's not the same as Nancy on Newstart copping an $85 fine for the same offence.

For senior executive Margaret, the fine is an inconvenience and quickly paid. For unemployed Nancy it's a devastating blow to her tight budget and fortnightly income.

We can all agree that the law should apply equally to everyone, but can the same be said for the penalty?

This is no longer a simple philosophical question or rhetorical point, because the increasing disadvantage experienced by the bottom 20 percent of income earners in Australia is seeing more and more people pushed to economic desperation.

Those on low and fixed incomes, including Centrelink payments and Disability Support Pension (DSP), have almost no capacity to save money and, increasingly, fines and penalties are out of all proportion to their circumstances.

The weekly income of an unemployed single person in WA now falls short by $8 every week to cover living expenses[i], and there are currently 209,305 Western Australians living below the poverty line.[ii] Our state has the highest rate of inequality in income distribution in the country.[iii]

Rent, food and power bills barely leave room for other expenses for those on low and fixed incomes. Frequently, paying one essential bill means forgoing other essential items, including food, medicine, school shoes or other overdue bills - and these are only made worse by the interest charged on unpaid fines.

A person on benefits who is literally unable to pay a parking ticket, cannot magically be made to find this money if the cost of the fine is made even greater with interest.

I'm not suggesting that poorer people should escape the law, but I am saying that penalties for infringements should take into account a person's income. Granted, that would be difficult to determine in many situations, but it's clear-cut when a person is living on a government benefit.

The average salary across Australia is now about $80,000, or $1,500 per week before tax for full time employment. Newstart recipients get around $270 per week and Age Pensioners around $400.

You can see the stark difference: Newstart is just 18 percent of the average salary, and pensioners just 27 percent.

Isn't it time we calibrated fines and infringements to recognise this? Rather than Nancy getting an $85 parking ticket, it would more fairly be closer to $20.

There will be those who say this is "unfair" and that poorer people would be given an "easy ride," but this ignores the fact that a $20 fine against Nancy is a strong penalty when compared to her weekly income. It is the equivalent of charging Margaret $425 for the same transgression, or five times the standard $85.

When someone can't afford to pay a fine they can face significant financial and emotional hardships, including loss of mobility due to suspension of their driver's licence, cancelation of car registration, seizure of personal goods, emotional distress, social exclusion, and imprisonment for fine defaulting and secondary offending - such as unlicensed driving.

For many people on Newstart or DSP, speeding, parking and fare evasion fines become insurmountable. The cost is impractical and the mounting interest or additional fines makes payment impossible, especially if their offending is related to poor mental health. Ultimately, if they lose their driver's license, it impedes their chances of looking for work and contributes to their poverty trap.

Some people in desperate financial trouble will opt for bankruptcy, but this option does not allow you to extinguish fines; they remain.

People who end up going to prison have their fines 'cut out' at a rate of $250 a day. The number of people entering prison to 'cut out' fines grew from 194 in 2008 to 1,358 in 2013.[iv]

Of the total fine defaulter population, 24 percent are unemployed and Aboriginal women are disproportionately imprisoned for this offence.[v]

As a community, we must ask ourselves what benefit is derived from jailing those who cannot pay fines, given the cost of imprisonment, to the taxpayer, vastly outweighs the lost income from the unpaid fine. The current system actually encourages people to 'cut out' fines in jail because it's quicker and cheaper (to the individual, not the State), to take that option.

Unemployed people, pensioners and those on disability support get a range of concessions and discounts in recognition of their disadvantage and modest income. It makes sense to expand this recognition to fines and infringements. Perhaps it's time to reconsider mandatory minimum fines or offer a sliding scale of penalty commensurate with a person's capacity to pay.

This is how it's done in Finland, Sweden, Denmark, Germany, Austria, France and Switzerland, all of which have some form of sliding scale for fines, determined by daily income and based on annual tax returns.

Another idea we could trial in WA would be to increase the translation of fines into community service for those on government benefits, working off their fines through a positive contribution rather than a negative penalty.

At the very least, it should be mandatory for WA Police and Transperth to explain to offenders the option of paying their fines via Centrepay, and through payment plans, before going directly to the Fines Enforcement Register.

Anglicare WA is calling for an informed community conversation around this issue, not just to help those on low and fixed incomes avoid the pitfalls of poverty traps, but also to save taxpayers money by confronting the false economy of disproportionately penalising the poor, or worse: jailing them.

Ian Carter AM is the CEO of Anglicare WA