Treasury on BERL report

I covered a while back the evisceration of a BERL report into the social costs of alcohol. This report inflated the cost by around 3000% (or $4.6b), and was being cited by the Law Commission as rationale for all sorts of law changes.

NBR reported at the end of last week that Treasury has now expressed concern about thre reliance being placed on reports such as this (which costs the taxpayer $135,000). NBR quotes Treasury Deputy Secretary Peter Bushnell:

The Berl report into the social costs of alcohol being used by the Law Commission is work that doesn’t look like it meets the “normal standards you would expect”, according to Deputy Secretary of the Treasury Dr Peter Bushnell.

There were numerous problems cited in the report by its academic reviewers, including:

“I think the points they’re making are sound about adding the costs of production into the cost of it, and not counting any benefits. In a market if you’re selling something that people are prepared to pay for, then they’ve at least got that much benefit, otherwise they wouldn’t have bought the stuff. So if you exclude the benefits then you’re clearly only looking at one side of the story.”

And as I have said previously,far too many Government reports look at costs only, and not benefits.

However, the mere fact Law Commission president Sir Geoffrey Palmer is seeking out economic advice is positive, “because in the past lawyers often assumed that economics had nothing to do with it.”

That said, the onus should be on the Law Commission to be rigorous Dr Bushnell said.

“Sir Geoffrey’s reputation is reduced [if] he’s putting weight on something that actually doesn’t stack up. So the Law Commission ought to … build in processes that give adequate QA and so on.

“What we’re saying is it’s your reputation that’s at risk here. It doesn’t reflect well on the Law Commission if it … backs [work], that doesn’t have a sound basis.”

That is a pretty undiplomatic serve. Basically saying if you use shoddy reports you’ll get a shoddy reputation.

I’m actually a fan of much of the work the Law Commission does (I like the fact they are pro-active not just reactive) but Ministers will not be as inclined to listen to them if they don’t make sure any reports they use as justification hold up to scrutiny.

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