No more excuses on asbestos payouts, Australia tells James HardieJun 29, 2006 | AFP asbestos products following a special tax ruling.
On Thursday, the Australian Taxation Office ruled that James Hardie Industries' contributions to its planned asbestos compensation fund will be tax deductable.
James Hardie welcomed the ruling but said the tax office's decision not the grant its compensation fund charitable tax status placed in doubt last year's agreement to pay victims some 4.5 billion dollars (3.3 billion US) in compensation over the next 40 years.
Treasurer Peter Costello said James Hardie had previously tried to cheat victims out of compensation by moving its base to the Netherlands and wanted "every tax rort (loophole) it can find."
"It tried to cheat the victims then cheat the tax man; now that it has got an obligation to pay the victims with full tax deductibility, it has no excuse for not paying," Costello he told public radio.
"Would it like more tax rorts? Of course it would but it has now no excuse whatsoever but to pay the victims and I would say to James Hardie, now is the time to acknowledge that this is an extremely beneficial ruling for it and to get on and pay the victims."
Victims and their supporters also welcomed the tax deductable ruling but said denying the fund charitable status would cut into the money earmarked for those suffering crippling respiratory diseases caused by exposure to asbestos.
"I am very pleased we have got this result because without this we would definitely have had no deal," asbestos campaigner Bernie Banton said.
"But unless we get the charitable status any money generated by the fund will be taxed and over the life of the deal that could amount to billions of dollars. It would leak out like a hole in a bucket."
James Hardie relocated from New South Wales to the Netherlands in 2003, prompting anger in Australia after it was revealed the company had established an under-funded foundation to compensate asbestos victims and attempted to divorce itself from future liabilities.
Under a deal struck last year, James Hardie pledged to pay compensation into a special fund for at least 40 years to meet the personal injury claims of asbestos victims.