Ross Greenwood
Smarter Writer

Ross Greenwood is the Nine Network's business and finance editor and hosts Money News on 2GB

Ross Greenwood
Smarter Writer

Ross Greenwood is the Nine Network's business and finance editor and hosts Money News on 2GB

Is the business of crime in decline? Thieves are taking half what they were a decade ago.

Most of us choose to live on the right side of the law, but crime, in some ways, can be treated just like any other business. Criminals use the risk and reward equation, just like business people. The risk side is obvious – you can get caught and be incarcerated. But some people see the rewards of crime as so great that they could potentially set themselves up for life.

I recently spoke to Dr Don Weatherburn, the director of the NSW Bureau of Crime Statistics and Research. He looks at crime right around the country, and the surprising thing is that over the past decade the crime rate, particularly for theft, has fallen off a cliff! It’s interesting to examine why.

cartoon robber

Ross Greenwood: Now, something interesting has been happening on that risk/reward equation. Some particular areas of crime are no longer paying and crime rates are falling. 

Don Weatherburn: That’s right. Robbery rates – that’s theft by violence or threat of violence – have come down from 2001 by 49 per cent. Burglary – that’s breaking into your home or premises and stealing something while you’re gone – that’s come down by 57 per cent. Car stealing is down by 62 per cent. And all other forms of theft have come down by 40 per cent. There’s been nothing like this since I started with the bureau back in 1984. 

Ross: So does this have to do with that risk/reward equation?

Don: That’s a very large part of it. First of all the rewards associated with crime went through the floor around Christmas 2000. Many people were committing crime to buy heroin. The price of heroin skyrocketed and the purity of it went from 80 per cent to 20 per cent – it just wasn’t worth buying, so one big reward was removed. And then two big costs were added as you worked through the 2000s: the risk of being caught went up and, if you were caught, the risk of going to jail went up.

On the other side of the ledger, the rewards for being involved with law-abiding activity - work - had big rewards. The unemployment rate was dropping and you had a much better chance of getting a job if you were a young person coming out of school without skills. And if you had a job, your average weekly earnings were rising rapidly. In short, there were more rewards associated with work, and fewer rewards associated with crime.

People will always exploit the opportunities that are there. Everything depends on the risks and rewards associated with those opportunities.

- DR DON WEATHERBURN, NSW BUERAU OOF CRIME STATISTICS

Ross: Now another factor is that the price of goods was generally dropping in Australia. It was so cheap for someone to just buy a TV in a shop, they didn’t want to buy a stolen TV off a bloke in a pub.

Don: Well I think that’s part of the reason, but it’s important to remember that crime rates were rising right through the 1990s. At one point Reeboks were expensive and they were being stolen. Then they stopped being expensive. And then video recorders became expensive – people were stealing those and selling them. So, even though goods rise and fall in their value, up until 2000 people were having no trouble finding new goods to steal.

Since 2000, the bottom just seems to have fallen out of the market. Now maybe it’s what you say, there’s just nothing worth stealing anymore because everyone’s got what they need. But another factor is that it’s got harder to sell stolen goods. For example, it’s hard to sell stolen cars these days. Engine immobilisers have made them hard to start and when someone does steal them, it’s hard to sell the parts because they can’t buy the compliance plates off wrecked vehicles and put them on their own vehicle and rebirth it.

Ross: But what has exploded has been identity theft and credit card fraud — these types of electronic theft. So is it a case where maybe the old-fashioned crooks got smarter, and they decided that they would thieve via the internet rather than by sticking a gun up someone’s nose?

Don: Well, I don’t think the old crims got smarter. I think what’s happened is that a new bunch of people have been presented with new opportunities for crime and managed to take advantage of it. People who were into using computers found they could get money off people over the internet by defrauding them. But other forms of crime have also cropped up that we didn’t have before.

When petrol prices skyrocketed, people started driving into petrol stations and filling up, and then driving off without paying. That hasn’t happened before. People will always exploit the opportunities that are there. Everything depends on the risks and rewards associated with those opportunities.

Verdict 

Now, these stats say something about the safety and health of our community. And an important thing Dr Weatherburn mentioned was that when it was easier to get a job, people had the incentive to work and less incentive to thieve. It will be interesting to see, with Treasury forecasts that unemployment will rise from the current 5.6 per cent to 6.25 per cent, and probably a rise in the level of youth unemployment, if that could lead to crime coming back into our community.

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