Force the States and Territories to means-test fines!

A fine is a weapon of class warfare. For a rich person, a fine may represent minutes of earnings or savings. For a poor person, it represents days of earnings and weeks or months of savings. Thus the poor are punished more harshly for the same alleged offence. That's the idea.

To facilitate indexing of fines for inflation, the law specifies fines in terms of a penalty unit, which is periodically revised. It would be easy to redefine the penalty unit in terms of a measure of capacity to pay. The income-tax system already provides such a measure. If it's reasonable to allow for your "capacity to pay" when taxing you, it's even more reasonable to allow for it when fining you — especially when (i) the payment of a fine is a less frequent event than the payment of tax, and (ii) the measure of "capacity to pay" need not be as complicated as the measure of "taxable income". So the lack of proportionality between the penalty unit and "capacity to pay" cannot be explained by any practical difficulty. It can be explained only by class warfare.

Unfortunately, as far as I can tell, it is not unconstitutional for the States and Territories to wage class warfare while collecting fines. But if the States and Territories have another cash cow which arguably is unconstitutional, the threat of a legal challenge to that cash cow can be used to extract concessions in the class war.

The "cash cow" that I have in mind is payroll tax, which arguably breaches s.90 of the Constitution. The States and Territories collectively raise more revenue from payroll tax than from any other "own-source" tax — far more than they get from fines. Although governments can replace payroll tax with something more efficient and equitable, they have shown themselves to be extremely reluctant to do so; and no such replacement would enable them to repay all the payroll tax that they have collected in the past! Governments would rather make reasonable concessions on fines than run any risk of having a major tax declared unconstitutional.

So, if a government tries to fine you more than you can afford, you might answer as follows:

  • If you lose in court, you will ask the magistrate to deduct the fine and costs, and any outstanding previous fines and costs, from the compensation owed to you for higher prices and/or lower wages and/or reduced employment opportunities due to payroll tax, which is an unconstitutional duty of excise.
  • Compensation for an unconstitutional tax takes precedence over the fine, because the Constitution is the supreme law of the land.
  • If the unconstitutionality of payroll tax somehow does not lead to compensation, you will still seek a declaration that the tax is unconstitutional, so that you can more easily earn or save enough to pay the fine.
  • As payroll tax applies to labour embodied in locally produced goods but not imported goods, the contention that payroll tax is an excise would have found support among both the majority and minority factions of the High Court in Ha v. NSW (1997).
  • If the penalty unit were defined in terms of capacity to pay, you would still object to the fine but would not be forced to seek a payment plan in the form of compensation for payroll tax.

If it's too late to plead not guilty, you can still run the constitutional argument if you are hauled before a court for inability to pay.

If and when you get a court date, you'll need to notify the Federal and State Attorneys-General that a constitutional issue is to be raised in the Local/Magistrates Court.

If a State or Territory is trying to fine you, your hope is that the State or Territory will "cop a plea" rather than risk billions in payroll tax. If a local council is trying to fine you, it is still appropriate to make a counterclaim on the State or Territory, not only because a successful counterclaim would provide the means of paying the fine, but also because the sizes of council fines are subject to State or Territory legislation. (In the ACT, the Territory government doubles as the local council.)

If enough people use this tactic, the State and Territory legislators will find it convenient to means-test fines so that the poor can adopt the same attitude to fines that the rich have always had: it's easier to pay it than to fight it, even if you're innocent. That depressing calculus has its own contradictions; but at least it doesn't amount to class warfare.

[Disclaimer: The author is not a lawyer. This article is not advice. If it helps you, you're welcome.]


It would be far better to challenge payroll tax and then argue for means-tested fines in the ensuing tax debate (GST increasing and/or base broadening would be significantly likely outcome as would a return to the pre-1971 situation of Commonwealth payroll tax). Only those who actually pay payroll tax (employers) would have a chance a compensation.

For means testing to be easy, the Commonwealth would need to provide income tax data to the states to go into the calculations. The Commonwealth could also make the suply of Commonwealth money to the states conditional on the states adopting it.

Means-testing fines is a good idea.