ALP proposes legislation: rescue Hardie's compensation deal

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ALP proposes legislation: rescue Hardie's compensation deal

Opposition Leader Kim Beazley said today Labor will move in Parliament to grant James Hardie a tax exemption to ensure its asbestos compensation plan goes ahead.

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Opposition Leader Kim Beazley said today Labor will move in Parliament to grant James Hardie a tax exemption to ensure its asbestos compensation plan goes ahead.

The establishment of a fund to compensate the asbestos victims has been delayed because it is contingent on tax deals which the Australian Tax Office has refused to accept.

Beazley said today he has asked Shadow Assistant Treasurer, Joel Fitzgibbon, to move an amendment in the next sittings of Parliament to specifically exempt the fund from income tax under section 50 of the Income Tax Act 1997.

'This will ensure that the fund is not liable to pay tax on contributions or earnings,' Beazley said.

Not a charity

Beazley said that although the Tax Office has given James Hardie tax deductibility for its contributions to the fund, it has ruled that the fund is not a charity. As a result, the fund will be required to pay tax on investment earnings and may be required to pay tax on payments made by James Hardie.

'This decision could result in the fund having billions of dollars less over the next forty years - bad news for asbestos victims,' Beazley said. 'That is why John Howard must support our amendment to protect current and future asbestos victims and their families.'

Black hole

Beazley said the Federal Government recently changed tax law to ensure James Hardie had tax deductibility for compensation payments as 'black hole expenditures'.

'I cannot understand why Peter Costello and John Howard now arrogantly refuse to finish the job - undermining the viability of the fund, while making out as if he is a defender of asbestos victims,' Beazley said. 'If Peter Costello was genuine about defending the interests of asbestos victims and their families, he would resolve the issue once and for all. If Peter Costello is not prepared to do that, John Howard should step in.'

Treasurer's position

Treasurer Costello has previously pointed out that BHP Billiton and CSR have full tax deductibility because they have accepted liability for asbestos compensation.

Accept liability

He said James Hardie could have the same deductibility if they also accepted liability instead of trying to set up a compensation fund that would be capped. He said he would not make special laws for James Hardie.

Beazley said the James Hardie saga has been 'a great human tragedy'.

'Hardies abused their obligations to their employees and customers and their families,' he said. 'The tireless efforts of the ACTU and State governments have provided hope that future victims of asbestos will have any justice.'

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