Australian Institute of Criminology

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Trends in the cost of crime

In 2011, the total costs of crime in Australia were estimated to be $47.6b, or 3.4 percent of national GDP. Between 2001 and 2011, there has been an estimated 50 percent increase in total costs, although inflation increased by 33 percent during this period (RBA 2013). In terms of national GDP, the costs of crime have actually decreased by less than two percent over the decade (1.6%).

Between 2005 and 2011, there has been an estimated 33 percent increase in total costs, although inflation increased by 20 percent between 2005 and 2011 (RBA 2013). In terms of national GDP, the costs of crime have decreased by less than one percent since 2005 (0.7%).

Over the decade between 2001 and 2011, all categories of police-recorded crime declined, except assault, sexual assault and shop theft. Police recorded crime statistics for attempted murder, robbery, burglary and vehicle theft all declined by at least 50 percent between 2001 and 2011.

In terms of the estimated costs of crime, the largest increase took place in connection with criminal justice costs, which increased by 154 percent in monetary terms between 2001 and 2011. However, the manner of calculating criminal justice costs has changed somewhat since Mayhew (2003b) first undertook her work and Rollings (2008) undertook her updated study for 2005. The present report undertook a more subtle and complete calculation of criminal justice agency expenditure on crime, which included an estimation of the prosecution costs incurred throughout Australia, a more sensitive calculation of the costs of Commonwealth agencies (which included some previously omitted costs), a new estimation of state and territory government agency costs associated with crime and its control, the inclusion of the cost of forensic mental health services, the cost of legal aid and household expenditure on crime prevention (that was included for 2001, but omitted for 2005). Although more costly, the inclusion of these additional categories, as well as the reduction in some other components, provides a more accurate indication of prevention and responses to crime in Australia in 2011.

On the basis of the present calculations, in 2011, Australia spent approximately $1,500 more on preventing and responding to crime than the actual cost of criminal acts themselves.

Future directions

The estimates in this report should be considered approximate and are not designed to reflect exact costs of crime for all categories of crime, nor the cost of prevention of, and responses to, crime. The difficulties associated with estimating the costs of crime have been explained in previous AIC publications (Mayhew 2003a, 2003b; Rollings 2008; Walker 1992, 1997), as well as in a number of academic papers (see Centre for Criminal Justice 2008 for a review). In particular, further research is needed to quantify the costs of crime associated with new and emerging crime types such as cybercrime, identity crime, organised crime, environmental crime and corporate crime. Although some aspects of each of these have been included in the cost estimates contained in this report, other specific costs have not been explored owing to limitations in the available data. The AIC has an active program of research into the areas of cybercrime, fraud, and serious and organised crime, but more research into emerging areas of crime is needed. Some recent Australian Government initiatives to ensure that new and emerging crime types such as identity crime and cybercrime are reported officially, will provide an improved source of information on the incidence and cost of these crime types for future cost of crime research. In addition, as identified by both Mayhew (2003b) and Rollings (2008), there is a need to quantify more precisely the cost of arson, including bushfire arson. Finally, the outcomes of the various recent inquiries into child abuse in Australia may yield useful information on the extent and costs associated with this crime category, including the important indirect, intangible and consequential impact of child abuse and exploitation on victims.

Further work is also needed to quantify loss of productivity of criminals due to their involvement in crime. This has not previously been costed due to a lack of data. This includes the extent to which criminals participate solely in the criminal world, how economically productive they might be if not engaged in criminal activities and the gross number of individuals involved in criminal activities—all of which are not currently quantified. This report accounts for the lost productivity of victims of crimes (time spent away from work, time spent fixing any damage, time spent in hospital etc), but does not attempt to quantify the lost productivity to society of those individuals who are engaged in illegal activities themselves.

Throughout this report, there are many instances in which relevant datasets do not exist in Australia and for which it was necessary to rely on information gathered in the United States and the United Kingdom. While these overseas estimates are likely to be a reasonable proxy for what occurs in the Australian context, it would be better to have actual Australian data. The areas where data in the Australian context are not available fall into four main categories—estimates of intangible losses and lost output, costs of crime to business, Australia-wide costs of injury estimates and limited data collected by the ABS in its Recorded Crime collection. Each of these areas was explored by Mayhew (2003b) and Rollings (2008), and apart from some updated information from the United Kingdom, little has changed.

The costing of crime remains an area of criminology where more research is required—both to improve and to refine costing methodologies and to improve data upon which estimates are based. This report provides an estimate of the costs of crime to the Australian community for 2011. Although every effort has been made to ensure that the existing information has been accurately compiled, the final outcomes are not definitive indications of what crime costs the economy in Australia. There are areas for which costs have not been calculated due to lack of data and areas where baseline data from other countries have been used to construct projections of the likely costs applicable in Australia. However, in the absence of more robust data, this report provides an up-to-date estimate of the costs of crime as far as it is possible to ascertain. The limitations of the data identified in this report provide valuable indicators of where sources of data could be improved that will, hopefully, enhance the accuracy and utility of future exercises of this nature.