Australian goverment bails out James Hardie
The federal and NSW governments have agreed to loan up to $US320 ($NZ449.69) million to a compensation fund for James Hardie asbestos victims.
A joint statement by Prime Minister Kevin Rudd and NSW Premier Nathan Rees said the federal government would lend NSW up to $160 million, which the state will put towards a loan facility of up to $320 million to top up the fund.
The loan facility will cover three years of compensation payments at current claim rates, the statement said.
The company has blamed the global financial crisis for a shortfall in the fund and its inability to make contributions this year.
''The advice to both governments was that, if action wasn't taken now, some asbestos victims faced the very real prospect of not surviving long enough to receive their full compensation payments,'' the statement said.
''This decision will help give peace of mind to asbestos victims and their families.''
Federal Finance Services Minister Chris Bowen said the fund was expected to run out of money in the next 12 months without intervention.
''The federal and New South Wales government have made a decision that this is appropriate to ensure that there's enough money in the fund until James Hardie returns to a position where they can make the contributions,'' he told ABC radio.
He said the government would be closely monitoring James Hardie's financial position to ensure it would resume contributing to the fund as soon as possible.
''We will be very closely monitoring of course James Hardie's financial situation and we will be ensuring that as soon as they are in a position to return to making payments they do so and meet their obligations,'' he said.
He said the company was expected to repay the government loan by 2020.
''We expect that the loan won't be repaid to the Commonwealth until the fund is in a stable and secure situation,'' he said.