A lobby group for victims of crime says the amount owed in unpaid fines and reparation makes a mockery of the justice system.
According to government figures released on Tuesday, New Zealand courts cancelled $95 million in fines in the past financial year.
Sensible Sentencing Trust spokesperson Garth McVicar says the figures are shocking and show how dysfunctional the justice system has become.
Mr McVicar says people who owe fines or reparation should be placed in custody until the outstanding amount is paid.
The figures show that the total amount of unpaid fines or reparation reached $806 million between July 2008 and June 2009.
From 1 July to 20 November 2009, $50 million of unpaid fines was remitted.
The largest fines cancelled so far in the 2010 financial year were owed by companies, the largest being $125,000 owed by an Auckland firm.
The Ministry of Justice's general manager for collections, Bryan Patchell, says the decision to remit fines is a judicial one.
Mr Patchell says when this is done, fines are usually replaced with an alternative sentence such as community work, home detention, curfews or imprisonment.
In the 2008 financial year, fines totalling $81.6 million were wiped.
The Labour Party says the Government has stalled work it had started to improve the courts fines system.
Labour Party spokesperson for courts and former courts minister Rick Barker says the figures show the fine system needs an overhaul.
Mr Barker says he began work to make the process more efficient but that work has not been continued by the Government.