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Monday, 28 November 2005
Page: 28


Mr LAMING (2:19 PM) —My question is to the Treasurer. Can the Treasurer update the House on the status of matters arising from the Jackson report into James Hardie Industries? What is the Commonwealth view on compensation for asbestos victims?


Mr COSTELLO (Treasurer) —I thank the honourable member for Bowman for his question. Like me, I am sure that he will believe that a company like James Hardie, which is responsible for manufacturing a dangerous product and which has a liability to users of that product, should observe its liabilities to victims and their families. The attempt to restructure assets to put them away from the reach of potential claimants ought to be thoroughly condemned. I think those directors of James Hardie, if they had knowledge that they were doing it for that reason, would think again. It should not have been tried, it should not have been done and it should not succeed.

Settlement of these claims has been proceeding between the company and victims groups in the state of New South Wales. The Commonwealth has not been a party to those negotiations, but there has been a suggestion that as part of the settlement directors of James Hardie will be given civil immunity by the New South Wales government. The Commonwealth will not support any civil immunity for directors of James Hardie given by the New South Wales government or otherwise.

I call on the federal Labor Party to endorse the Commonwealth government’s position. The Commonwealth government has set aside $7½ million to fund an investigation and litigation of issues arising from the Jackson report. If an immunity is given to the directors of James Hardie, that will frustrate that investigation. As the Deputy Chairman of ASIC said to a Senate estimates committee in the week of 30 May, extinguishing civil penalty for James Hardie directors ‘may have the effect of neutralising the entire investigation and the outcome’. So we call on the New South Wales government not to give any immunity whatsoever to the directors of James Hardie and we indicate to the New South Wales government that the Commonwealth will not be assisting.

In addition to that, I would make clear that James Hardie, as responsible to the victims of asbestosis, will be required to comply with Australian tax law. If it makes a payment that is tax deductible, that will be deductible under Australian tax law. If it makes a payment that is depreciable, that will be depreciable under Australian tax law. If it wants to take advantage of black hole expenditures, it can take advantage of black hole expenditures. James Hardie can structure its payments to take advantage of the tax law.

The suggestion however that this parliament should pass a new tax law so that the taxpayer picks up some of the obligations of the directors and the shareholders of James Hardie will not be agreed to by the Commonwealth parliament. Passing a special law so that shareholders’ obligations are picked up by the Australian taxpayer is the equivalent of asking that the taxpayer pay a sum—which would be a much more honest way of doing it—to pick up the obligation of James Hardie’s shareholders. It is not the taxpayers’ obligation to pick up the obligation of the James Hardie shareholders or their directors. The James Hardie directors ought to accept responsibility for the victims, for the poor people who have been injured by their product, and the shareholders ought to be bearing the cost of that rather than putting it off onto the Australian taxpayer.