Why can’t MBIE defend its cost estimation for TPP on copyright?

Richard Harman writes on Politik:

The Ministry of Foreign Affairs and Trade has simply dismissed claims that some of the economic modelling on the contained a basic arithmetical error.

The report back to Parliament yesterday of the Select Committee considering the TPP does not show any substantial reasoning behind the Ministry’s conclusion.

The error was allegedly contained with the modelling of the economic cost of extending the term on recorded music from 50 to 70 years.

The Ministry’s National Interest Assessment claimed this would cost New Zealand consumers $55 million.

In fact, said an internationally recognised copyright lawyer and economist, Dr George Barker, Director of the Centre for Law and Economics from Australia National University the total cost to New Zealand of the copyright extension term was more likely to be around $250,000.

In his evidence to the committee, Dr Barker said Ministry of Business Innovation and Employment officials who did the calculations for the Ministry of Foreign Affairs had simply guessed how much the cost to New Zealand of extending the copyright term on film and television would be by assuming it would be exactly total figure as for recorded music.

“But, he said when they did that they  did not realise  that  the original calculation supplied by an Australian consultant had seriously  overestimated   the costs for music  by more than 40 times

“The Government officials may have inflated the already overestimated   annual cost of term extension by around  $49 million,” he said.

I don’t like the increase in copyright term in TPP. I disagree with Dr Barker on most copyright issues. However I suspect he is right on the issue of the estimate that the cost of extending the term of copyright from life plus 50 years to life plus 70 years would be $55 million a year.

That figure fails the common sense test.

Think about what that change means over the next 20 years? It means that works created by artists who died between 1945 and 1965 now won’t come out of copyright for another 20 years.

Now I can’t imagine that NZers consume $55 million a year of works by people who died between 50 and 70 years ago. 99.9% of what I watch and listen to is far more recent than that.

So the MBIE figure of $55 million a year fails the common sense test. Unless they can provide the detailed calculations they used to calculate it, the estimate is very suspect.

Ironically the thrust of Dr Barker’s evidence is to make the TPP more attractive to New Zealand since it would lower the estimated cost to consumers of the extension of the copyright term.

This is the irony. The Government has seemingly over-estimated the costs to NZ of the TPP.

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