Fraud costs us $6 billion each year: Australian Institute of Criminology

FRAUD is costing Australians $6 billion-a-year, as a new report reveals the total cost of crime is a staggering $47.6 billion and growing.

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FRAUD costs Australians $6 billion a year — making it the most costly crime to the community.

Fraud now accounts for $1 in every $8 of crime related costs according to a new report by the Australian Institute of Criminology: Counting the costs of crime in Australia: A 2011 estimate.

In Victoria there are more than 300 separate criminal offences that could be charged in connection with acts of dishonesty or fraud against individuals, businesses and government, from small-scale credit card fraud through to major corporate financial crime, sometimes costing billions of dollars.

The total cost of crime was estimated at $47.6 billion, or 3.4 per cent of Australia’s national gross domestic product.

And the cost of preventing and responding to crime is now $1.5 billion a year higher than the cost of the crimes themselves.

AIC director Adam Tomison said it was important to understand the relationship between the direct costs of individual crime types and the cost of responding to them to allow policy makers to better target funding.

“Some policy responses to crime are extremely costly to implement, particularly those that require police action and the use of correctional service,” he said.

“Governments need to be able to assess whether the benefits of relying on particular responses are greater than the benefits of adopting alternative strategies that might be less costly, but more

effective in reducing the harms associated with individual crime types.”

The cost of crime has risen 50 per cent rise since 2001, when the total cost of dealing with crime was put at $31.8 billion. Inflation increased by 33 per cent during this period but crime has decrease as a percentage of GDP from 3.8 per cent in 2001.

Direct crime costs were more than $23 billion in 2011, but the cost of dealing with crime was $1.5 billion more.

Administration of criminal justice agencies such as police, courts and prisons topped the list at more than $16 billion, followed by the security industry, household precautions, providing assistance to victims, insurance administration and investment in crime prevention measures.

These costs doubled, from $12.8 billion to $24.6 billion, between 2001 and 2011.

Some of that increase is due to the inclusion of additional Government agency costs in the calculations.

“While the growth in the cost of specific crime types has been relatively small when considered

as a proportion of national GDP, the level of change of preventing and responding to crime has been more pronounced,” Mr Tomison said.

CRIME COSTS:

Fraud — $6.05 billion (+3 per cent since 2001)

Drug abuse — $3.16 billion (+61 per cent)

Assault — $3.02 billion (+110 per cent)

Criminal damage — $2.73 billion (+103 per cent)

Arson — $2.27 billion (+68 per cent)

Burglary — $1.65 billion (-33 per cent)

Homicide — $1.25 billion (+34 per cent)

Sexual assault — $775 million (+237 per cent)

Thefts from vehicles — $677 million (+28 per cent)

Other theft — $605 million (-6 per cent)

Thefts of vehicles — $421 million (-52 per cent)

Robbery — $372 million (-38 per cent)

Shop theft — $124 million (-85 per cent)

Drug abuse — $3.16 (+61 per cent)

Sub Total — $23.1 billion (+21 per cent)

OTHER COSTS:

Criminal justice — $16.26 billion (+154 per cent since 2001)

Security industry — $3.4 billion (+8 per cent)

Household precautions — $2.36 billion (+5 per cent)

Victim assistance — $1.88 billion (+113 per cent)

Insurance administration — $670 million (+34 per cent)

Sub Total — $24.56 billion (+93 per cent)

TOTAL COSTS

Crimes and other costs* – $47.6 billion (+50 per cent)

* minus the $64 million value of confiscated criminal assets

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Originally published as Fraud costs us $6 billion each year: Australian Institute of Criminology