Confusion over Hardie tax rulings

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Confusion over Hardie tax rulings

The Premier of NSW, Morris Iemma, has welcomed a tax ruling to allow tax deductibility of the James Hardie company's contributions to its asbestos victims compensation fund, but the ACTU is concerned the fund is still in jeopardy.

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The Premier of NSW, Morris Iemma, has welcomed a tax ruling to allow tax deductibility of the James Hardie company's contributions to its asbestos victims compensation fund, but the ACTU is concerned the fund is still in jeopardy.

However Treasurer Peter Costello says that after 'trying to cheat and get its money out of the country' Hardies now has no excuse but to pay up.

Iemma said today the tax ruling was a vital breakthrough that had brought the compensation deal 'back from the brink'. However he said the ruling did nothing to address last week's decision that disallowed charity status for the fund.

'I am advised that last week's ATO ruling could cost victims of asbestos up to $1.4 billion in tax paid over the life of the agreement.'

No special laws

He called on Treasurer Peter Costello to introduce legislation to provide charitable status for the fund.

Costello has repeatedly said he will not make special laws for James Hardie. He said today that James Hardie must acknowledge that the tax ruling is extremely beneficial to the company and make payments to asbestos victims.

'Having tried to cheat and get its money out of the country, it has now been granted full tax deductibility,' he said. 'You can't do better than that - it's got itself back in the situation of BHP, CSR. Would it like more tax rorts? Of course it would, but it now has no excuse whatsoever but to pay the victims.'

Still in jeopardy

However the ACTU says it is concerned James Hardie's compensation fund for asbestos victims could still be in jeopardy, despite the ruling allowing it to make its contributions tax deductible.

ACTU secretary Greg Combet said the building company claims the final funding agreement remains in doubt because of the ruling denying charity status. Combet said it is unclear what the overall impact will be.

Nullify effect

'There is a possibility on the advice I've had to date that the first ruling could nullify the effect of the second,' he said.

Iemma said 'the only person standing in the way is Peter Costello, who is out there insisting that he should take a cut of the money going to victims and their families'.

'I believe he is 100% wrong in that.'

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