SUBJECTS: James Hardie, asbestos victims, Commonwealth loan
NARRATOR:
Chris Bowen is the Federal Government Minister responsible for the deal.
He spoke to our reporter in Canberra, Samantha Hawley.
CHRIS BOWEN:
The Federal and New South Wales Government have reached an agreement to make a loan to the James Hardie asbestos fund.
The Commonwealth will be lending the money to New South Wales. New South Wales will make a loan to the fund to ensure that there's enough money in the fund in the short term to deal with claims from asbestos victims.
We don't think it's appropriate that asbestos victims need to wait on some sort of instalment plan.
SAMANTHA HAWLEY:
And how many victims are actually being impacted by this at the moment?
BOWEN:
Well I don't have the number of recipients from the fund but I am aware that the fund would be expected to run out of money within the next 12 months with payments to victims with no contribution from James Hardie.
So the Federal and New South Wales governments have made the decision that this is appropriate to intervene to ensure that there's enough money in the fund until James Hardie returns to a position where they can make a contribution.
HAWLEY:
And there was some concern that some of the victims could die before they actually got their instalments if it was to continue as it was.
BOWEN:
Yes. This is a very legitimate concern on behalf of the victims. The nature of the disease is that by the time they've gone through the process of receiving money from the fund, that often they are very keen to see the compensation payments in their bank accounts so that they know that their family is going to be catered for, so they have no uncertainty.
HAWLEY:
Has James Hardie advised the Government of when it might be able to return to contributing to the fund?
BOWEN:
Look they've certainly indicated that they will not be able to contribute this year. Much of it depends on the health of the United States housing sector. They have a lot of exposure to the United States housing sector.
We'll be very closely monitoring of course James Hardie's financial situation and we'll be ensuring that as soon as they are in a position to return to making payments that they do so and meet their obligations.
HAWLEY:
And they'll also have to now repay a government loan. So when will you expect that they do that and is there a timeframe on when you will want that money back?
BOWEN:
Well the loan from the Commonwealth to New South Wales is to be repaid by 2020. We expect that the loan won't be repaid to the Commonwealth until the fund is in a stable and secure situation.
HAWLEY:
I guess some people would argue: why do taxpayers now have to pick up the pieces from James Hardie's failures?
BOWEN:
As much as we would like to say that this is all, that James Hardie must find the money in the short term, the economic situation is such that that's simply not possible.