What on Earth is a ‘Penalty Unit’? And Why is it a “Punishment”?

by The FindLaw Team

We here at FindLaw love reading about law and discovering what actually constitutes an offence. It’s interesting work, but there are many questions that may arise when reading an Act. One example is constant appearance of the words, ‘penalty unit’. What is a penalty unit? And why are penalty units used, rather than a monetary amount? Other questions that may pique your interest are: what is meant by ‘common law’ and ‘statute law’? Aren’t all laws created equal? 

It’s easy to overlook the basics of law so it’s always useful to brush up on the fundamentals.

Definition of a ‘penalty unit’

A penalty unit is used to calculate the amount payable for an individual who has been found guilty of an offence.

In Queensland, 1 penalty unit is the equivalent of $100, while, in New South Wales it’s $110. Finally, committing an offence in Victoria is an expensive proposition, 1 penalty unit there is worth $119.45. A nice round number if there was one. 

Using public drunkenness laws as a practical example of how penalty units are used let’s compare Queensland and Victoria’s laws. In Queensland, the maximum penalty for being drunk in a public place is 2 penalty units, which equals to $200. In Victoria on the other hand, and the maximum penalty there is 8 penalty units, which comes to a whopping $955.60 fine.

Why use ‘penalty unit’ instead of a cash amount?

Fines are constantly being changed, so if legislators use a monetary amount, the constant amendments would be difficult to change, and reflect in the law. For that reason, the use of penalty units is a more efficient unit of measurement.

What are common and statute law?

Australia has inherited our legal system from England, which is generally known as a ‘common law’ system. Common law is derived from judges, who make a decision on the facts of a case, and gives a reason for their decision, which is then published in law reports. Over time common disputes have come before judges and usually have a similar outcome. Hence, common law is created.

Statute laws are created by Parliament, and is commonly known as ‘Acts’. An Act becomes law if there is a date specified on when the Act shall commence, or when it is published in the Government Gazette. Once an Act is proclaimed, it becomes law.

What happens if the common law is different from a statute?

In the event that the common law is different from an Act created by Parliament, the Act takes precedence over the common law to the extent of the inconsistency. Also, if the common law creates a new principle, Parliament can create an Act to overrule or vary the principle.


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