It's possible this could be considered extortion, but laws regarding extortion and other similar threats vary by state in Australia and you did not indicate your state.

Regardless of whether it would be a crime in your jurisdiction or not, this type of behaviour (threatening to make you repeat the subject for not providing details about the police report) is likely to be in violation of the institution's professional ethics codes or standards of behaviour for faculty and staff members.

You should report the incident to the dean or someone else who has a senior/top-level position at the school/institution—someone who would therefore have the power and authority to investigate and potentially discipline the lecturer for his/her actions.

It is worth asking though—Did your absence cause you to miss something very important like a test/exam? And how much class time did you actually miss total?

I'm trying to understand why the threat of making you repeat the subject (and having to pay additional fees) seems so disproportionate in response to your actions.