Crime and punishment

Phil Ruthven runs the ruler over corporate misdemeanours.

There is an old adage that says crime doesn’t pay. We all like to think that is true, that people get caught and punished for things ranging from theft to corporate malfeasance to serious assault and murder.

That is in fact a fallacy. Crime has succeeded throughout history. Even at the end of the twentieth century, only one in a hundred crimes in Australia – that on paper were liable to a jail sentence – were detected, brought to court and punished with a jail sentence. So, 99 out of 100 crimes eventuated without the offender being incarcerated, easing to 98 out of 100 two decades later as we head towards 2020.

There are fewer than 40,000 people in prisons, or 2.1 people for every 1,000 adult Australians. But prisons are not always the answer. If so few people get caught and punished anyway, addressing the challenge of reducing the crime rate is problematic.

To assume wrongdoers are well off and happy would be just as untrue as saying crime doesn’t pay. A small minority might be making a living, or a ‘killing’, and be happy, but most don’t make a lot of money (even if that was the intent of the crime).

Let’s begin with crime-at-large in Australia and finish with corporate crime.

One of the long-held myths in Australia is that we have a much lower crime rate than other countries, and that our nation is one of the safest in which to live in terms of victimisation. It is not as clear cut as that.

It is true that the homicide rate is low in Australia, and indeed has remained almost constant at just under twenty murders per million citizens for over two centuries. There are other countries with lower rates such as major European nations and Japan, but there are also many much higher rates such as the US with close to 50 murders per million, Russia with more than 100 per million and South Africa with more than 300 per million.

Contrary to popular opinion, we are not experiencing a runaway increase in murders.

When it comes to serious assault, Australia is high on the list of nations from data of the mid-2010s. Then, nearly three people per thousand citizens were assaulted, placing Australia well up the danger ladder.

Yet the incidence of robbery and motor vehicle theft has dropped like a stone in this century.

Robbery has dropped from 1,350 per million people in 2000 to just 300 per million in 2017, a near 80 per cent fall. Motor vehicle theft has dropped from 7,200 per million people to 2,100 per million, a 70 per cent fall.

The exhibit on the page opposite suggests Australia spends more than $40 billion addressing crime and its punishment, with police and justice outlays accounting for almost two-thirds of the total.

The exhibit doesn’t pretend to be exhaustive. Clearly, we can add a lot of protective spending on security measures and devices for houses, buildings, motor vehicles and persons. These would add some billions of dollars.

There are around 750,000 crimes detected each year in the late 2010s that are liable to, if not warranting, a conviction and jail sentence. However, the detected number at the end of the twentieth century was more than a million, so the good news is that crime rates are abating, with prospects of lower rates through much of the rest of the twenty-first century.

It is very important however to put some caveats on crime and crime statistics, as all authorities do. Firstly, society and legislators have added (and sometimes removed) definitions of crime and other non-criminal offences over the past century or so.

Secondly, the reporting of crime has risen significantly: no longer are people prepared to take-it-on-the-chin, or are less inclined to feel shame. Finally, we have become more litigious and are more insured, as persons and with our property, and can seek monetary compensation for victimisation.

Unemployment is much lower than the disgraceful 30-year period from 1977 to 2007, when rigidities by unions, employers and governments prevented the restoration of full employment. Second, the drug problem could and probably will become more contained but never removed.

Third, preventative measures for crimes against the person and property are growing rapidly. This involves self-precaution, security-systems, surveillance, deterrent devices and other measures.

Deterrents for mobile phone theft are now in place, and the combination of micro-dotting vehicle chassis and coded entry systems for cars are now in process. On the other hand, electronic fraud in the form of identity theft is skyrocketing, and we need counter measures to this scourge.

Policing is also advancing in leaps and bounds, including more surveillance (including electronic) and forensic techniques (including DNA), among other measures.

In terms of corporate crime, Transparency International in its Corruptions Perception Index in 2016, had Australia at thirteenth most honest, ahead of the US and Japan but behind NZ, Singapore, Canada and others. Among 230 nations, this is good but can be improved.

Our regulators are active. Over the past decade, 29 of our top 50 corporations have been in court appearances. The Australian Competition and Consumer Commission (ACCC) has undertaken 669 actions over the past decade. The Australian Securities and Investments Commission (ASIC) has examined around 5,000 criminal matters. The Australian Taxation Office (ATO) retrieves some $10 billion per year in corporate tax evasion. And Fair Work Australia has secured smaller amounts, but where they have, it has amounted to a claimed $900-plus per employee.

Given the nation has 2.1 million businesses, of which more than 830,000 employ workers other than the owners, we seem to have relatively low rates of corporate crime.

Much of twenty-first century Australia will prove, hopefully, to be less crime-ridden and safer than the closing decades of the twentieth century. But, if so, it is because we are addressing crime differently in the new age we live in, both in terms of security and prevention as well as the forms of punishment which less and less is involving prisons and the unfortunate recidivism they seem to breed.