Sunday, May 27, 2012

Finnish off speeding motorists for good ....

Australia's own eccentric billionaire, the incomparable Clive Palmer steamed on last week, marking his $2 billion devaluation at the hands of the boffins at BRW's Rich List by initiating several immediate austerity measures, including not paying a $333 speeding fine issued by the Queensland police.

Who knows what Palmer's state of mind was in January when he drove his Mercedes-Benz along the Gold Coast's Oxley Drive at 87km/h, 27 clicks above the speed limit?

Whatever it was, he's not saying. But he's not paying, either.

Palmer can consider himself fortunate that his traffic infringement occurred in Queensland, rather than, say, Finland, where such traffic-offence penalties are very, very different for wealthy people.

In Finland, police have a complicated formula for calculating traffic fines. It incorporates the seriousness of the offence, of course, but also accounts for the personal wealth of the culprit. Police take the monthly income of the speedster, subtract a minimum monthly universal living expense of €255 ($328), adjust for the number of dependants and the degree of the offence, and divide by 60. 

Consequently, very rich people who travel very fast in Finland find themselves in a special world of pain - such as the then Nokia chief executive Anssi Vanjoki, who in 2002 collected a €116,000 ticket for riding his cherry-red Harley-Davidson at 75km/h in a Helsinki 50-kilometre-zone. His income was about €12 million at the time.

How would our own lead-footed mining billionaire fare in such a system? Well, it's hard to pinpoint exactly what Palmer's annual income is but he told Lateline's Tony Jones in February that his most recent personal tax bill was $70 million. Assuming the top personal marginal tax rate of 45¢ in the dollar, that puts his income at about $155 million, which is about €120 million.

So if he had exceeded the Finnish speed limit by 27km/h, he would be looking at a speeding ticket of about €1.2 million, or, in Australian money, about $1.5 million.

Finland is not the only country with a progressive fine system.

A few other European countries do it, too, such as Switzerland, where in August 2010 an unnamed motorist, streaking along in his Mercedes at 290km/h, copped a fine of a little more than $1 million. The reasoning behind the whole concept is that fines are an alternative to prison, and prison itself is a financial penalty as it deprives the prisoner of potential earned income.

So if prison is a more costly privation for the wealthy man, why shouldn't the fine follow suit?

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