Gil Elliott was responding to the release of figures by the Ministry of Justice showing an offender levy generated more than $16.6 million since its introduction in 2010.
The $50 levy is imposed on all offenders at the point of sentencing and contributes to support services for victims.
Mr Elliott, the spokesman for the Sensible Sentencing Trust Otago-Southland, said the levy was ''supposed to punish offenders and be good for victims''.
However, he understood the offender levy was not being paid, and ''the Government is pretending to be penalising offenders''.
The ministry said it was not in a position yesterday to respond to allegations offenders were not paying levies.
Mr Elliott said levies should come from general taxation, as ''there's definitely going to be people who won't pay it, despite what the Government says''.
''I don't care how the money is raised, it is just that victims ought to be paid a certain amount of money to keep them afloat,'' he said.
''Some victims actually go bankrupt because they have to pay so much out.
''You can't compensate for the loss of a child, but there were so many expenses the Government doesn't seem to understand.''
In a media statement this week, Justice Minister Amy Adams said: ''While we can never undo the hurt and grief that victims suffer as a result of crime, this levy helps ease some of the financial and emotional pressures.''
The offender levy ensured offenders contributed to addressing the harm their offending has caused, she said.
''It also generates a revenue stream that funds additional services for victims of crime.''
It was forecast $4 million would be collected this financial year.
Grants have also been granted for victim support services, such as providing assistance for families of homicide victims.
The offender levies included $1,110,720 paid to the victims of crime in Otago and Southland between 2011-14.
Of that, Dunedin victims received $418,530, followed next by Invercargill ($368,380), and Queenstown ($88,480).
