Tax case puts asbestos fund in jeopardy
A dispute between manufacturer James Hardie and the Australian Tax Office could affect the company’s contributions to a fund set up to compensate asbestos victims.
James Hardie CEO Louis Gries told an information meeting last week that the $240 million tax dispute, disclosed in June, risks reducing future funding to the Asbestos Injuries Compensation Fund (AICF).
Executive Vice President Asia Pacific Peter Baker told insuranceNEWS.com.au tax payments could affect the company’s cash flow, which could in turn affect contributions to the AICF because they come out of that cash flow – capped at 35%.
But he says the scenario is “more a hypothetical” at the moment.
“First of all we don’t know if any tax payments have to be made,” Mr Baker said. “Also, we have allocated $114 million to the fund to March 31 2009, which is worth nearly three years of expected compensation payments. So we have got a bit in there to withstand certain shocks.”
The annual report of the AICF released last week says a tax bill could affect future funding, with further concern over James Hardie’s second-quarter results, which reflect the challenging economic conditions in the US.
AICF CEO Dallas Booth told insuranceNEWS.com.au the organisation is obliged to note any post-balance date events, and James Hardie’s issues with various tax authorities could potentially impact available funds to the AICF.
James Hardie CEO Louis Gries told an information meeting last week that the $240 million tax dispute, disclosed in June, risks reducing future funding to the Asbestos Injuries Compensation Fund (AICF).
Executive Vice President Asia Pacific Peter Baker told insuranceNEWS.com.au tax payments could affect the company’s cash flow, which could in turn affect contributions to the AICF because they come out of that cash flow – capped at 35%.
But he says the scenario is “more a hypothetical” at the moment.
“First of all we don’t know if any tax payments have to be made,” Mr Baker said. “Also, we have allocated $114 million to the fund to March 31 2009, which is worth nearly three years of expected compensation payments. So we have got a bit in there to withstand certain shocks.”
The annual report of the AICF released last week says a tax bill could affect future funding, with further concern over James Hardie’s second-quarter results, which reflect the challenging economic conditions in the US.
AICF CEO Dallas Booth told insuranceNEWS.com.au the organisation is obliged to note any post-balance date events, and James Hardie’s issues with various tax authorities could potentially impact available funds to the AICF.