James Hardie may have to draw on a government loan to cover
its asbestos compensation fund despite paying shareholders dividends of almost $600m
in the last two years.
SMH reports that the company pays about 35 per cent of its operating
cash flow to the Asbestos Injuries Compensation Fund (AICF).
The AICF, which was the result of an agreement between James
Hardie and the NSW government, exists to compensate victims suffering from
asbestos-related diseases such as mesothelioma.
In 2010, the NSW and Federal government’s set up a loan
scheme to assure compensation payments would be met even if James Hardie did
not have sufficient funds to do so. The tax payer-backed loans can be up to
The number of claims has increased and it looks like the
company will not be able to meet the payments without access to the loans.
Senator Nick Xenophon slammed James Hardie for getting
itself in this position as it pays its shareholders large dividends.
“The bottom line is if James Hardie can afford $500
million to give to shareholders it can find the money to give to dying victims
of their product,” Mr Xenophon said.
“If James Hardie doesn’t come to the table they deserve
the scorn of the Australian public. They have got through the GFC.”