There are increasing calls to change speeding fines in Australia from a flat rate for all motorists to an amount based on the driver’s income.
A report published by The Australia Institute found that flat-rate traffic fines for speeding are unfair and ‘regressive’.
The think tank explained that the standard fine represents only a small share of income for the wealthy, while the same fine can be a significant burden for people on low incomes.
The research suggested Australia should introduce a system similar to Finland’s, where speeding fines are proportional to a person’s income.
Since 1921, Finland has imposed fines on speeders based on their monthly income and whether they have financial dependents.
In Finland, drivers who exceed the speed limit by more than 20 km/h receive a fine proportionate to their income, known as a ‘day fine’. This represents the income someone would lose if they spent a day in prison instead of working. .
In 2023, wealthy Finnish driver Anders Wiklöf was fined almost $200,000 after being caught driving 32 km/h above the speed limit, with the fine based on his high income.
The Finnish system means that low-income people caught speeding less than 10km/h over the limit will be fined $33, while those in the highest income bracket will be fined $295.
The Australia Institute report explains that Australia has a flat rate system for road traffic offences
In 2023, wealthy Finnish driver Anders Wiklöf (pictured) was fined almost $200,000 – based on his high income – after he was caught driving 32 km/h over the speed limit
In Australia, motorists are penalized on a fixed rate basis depending on the driving offence.
“The current system places a disproportionate burden on low-income drivers; a billionaire can pay a $200 fine much more easily than a retiree,” the report said.
‘Fines therefore effectively ‘criminalise poverty’, while for wealthy drivers they are ‘just a slap on the wrist’.
‘This inequality undermines the principle of proportionality of justice, which requires that the punishment for a crime should be proportionate to the seriousness of the crime.’
Australia Institute research manager and co-author Alice Grundy explained that traffic fines forced low-income people to choose between buying essential items or paying the fine.
Meanwhile, the same fine was only a “minor annoyance” for high-income Australians.
“For someone on a low income, speeding fines can be crippling,” says Alice Grundy.
“It’s unfair to make a billionaire pay the same $200 speeding fine as a low-income earner.”
‘Proportional speeding fines are fairer because they ensure that the amount of the fine is determined based on the driver’s income.
‘Australia’s regressive speeding penalty system effectively criminalises poverty.’
The report used income data from the Australian Bureau of Statistics’ latest Survey of Income and Housing to demonstrate the income-based penalty system.
A driver who has no dependents and lives in Woollahra – one of Sydney’s wealthiest suburbs – caught exceeding the speed limit by 11km/h would be fined $361 under the existing system.
However, under the proportional system, the same driver would be fined $508 because his monthly disposable income of $4,990 puts him in the second highest income category.
By comparison, a motorist with three family members in Blacktown – one of Sydney’s lower-income suburbs – would be fined $75, based on their monthly disposable income of $1,898 and the number of family members.
The report also highlighted the harmful effects of the current system on low-income people.
It cited the example of Yamatji woman Ms Dhu who died in 2014 while in custody in Western Australia because she could not pay her $1,000 fine.
The report cites a harrowing example of a First Nations woman who died in 2014 while in custody in Western Australia because she was unable to pay $1000 in fines.
“While Australian states no longer send defaulters to prison… fines can still be a serious setback for people on low incomes,” the report said.
‘Accrued unpaid fines can create a vicious circle, where a criminal record or enforcement actions such as a canceled car registration or driver’s license lead to a reduced ability to work and pay fines.’
Zyl Hovenga-Wauchope, director of Financial Counseling Victoria, said speeding fines were contrary to Australia’s fair go principles.
“In the land of fair go, it is clearly unfair that speeding fines are imposed at a fixed rate,” Hovenga-Wauchope said.
‘While they are essentially a mosquito bite for the rich, they can be earth-shattering for the poor.
‘This important report shows that things can be done differently; we can do better. A proportionate penalty system is an important step in creating a fairer Australia for all.”
The report claimed that abandoning the regressive system of fixed-value fines for the Finnish system of means-tested fines would create a much fairer system.
