Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Hansard source

I thank the honourable member for her question and for her longstanding advocacy on the part of victims of asbestos. The struggle for proper compensation for victims of asbestos in Australia has been a long one. It is a struggle which was, of course, led by the late Bernie Banton and is being ably continued by his widow, Karen Banton. Following significant pressure being brought to bear on James Hardie, the New South Wales government secured an agreement with James Hardie in 2005 which required the company to provide funding for personal injury claimants who had been exposed to James Hardie products and asbestos in Australia.

I take the opportunity of acknowledging the many, both inside and outside the House, who have been passionate on behalf of asbestos victims, particularly the Minister Assisting the Minister for Climate Change in his former role as secretary of the ACTU. The 2005 agreement resulted in the creation of the Asbestos Injury Compensation Fund. This fund saw 607 claims on it in 2008-09 and 565 claims in the preceding year. Under the agreement, James Hardie has been obliged to contribute 35 per cent of their free cash flow each year.

On 23 April this year, James Hardie advised the Australian Securities Exchange that it will not be in a position to make a contribution to the fund in the current year because of its very significant exposure to the depressed United States housing market. The advice to the Australian government from the fund was clear: projections were that the fund would be exhausted within two years. In fact, the fund was close to applying to the Supreme Court of New South Wales to move from providing full compensation payments to an instalment compensation payment system. Under these proposed arrangements, asbestos victims faced the very real prospect of not receiving their compensation payments before the end of their life. In our view, this was simply an unacceptable outcome.

On 7 November, the Prime Minister and the Premier of New South Wales announced an in-principle agreement for a loan facility to be made available to the fund that will cover three years of compensation payments at current claim rates. This joint agreement will mean that sufferers of asbestos related diseases will receive compensation payments in full, including their high upfront medical and carers costs. Under the joint agreement, the Australian government will provide a loan of up to $160 million to the New South Wales government that will go towards a loan facility of up to $320 million, to be made available to the fund for the purpose of meeting this shortfall. This decision will give hope and peace of mind to victims of asbestos and their families. The CEO of the Bernie Banton Foundation, Karen Banton, said:

Asbestos disease sufferers across the country, I am sure, are very thankful that their fears are now allayed, that if they need to make a claim they are able to and they have some financial security for their family should they lose their battle.

I want to make this very important point: this agreement in no way absolves James Hardie of their legal or moral obligation to victims of asbestos. The Australian government and the New South Wales government expect James Hardie will resume making substantial and regular contributions to the fund in coming years, in accordance with the terms of the agreement. However, this agreement between the Commonwealth and New South Wales does provide peace of mind to victims of asbestos and their families, and in our view they deserve nothing less.

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