When you’ve made a lot of money out of a product
that kills people, good publicity isn’t always easy to come by. But
James Hardie managed it on Friday, when, supported by a parade of
asbestos victims
, trade unionists and Labor politicians, it
managed to present itself as the injured party over a tax office ruling.

The ATO had ruled, understandably enough, that the
compensation fund for asbestos victims is not a charity. Hardie said that “This development places the viability of the Final Funding
Agreement in doubt”, and described tax exemption for the fund as “a
condition precedent” to implementation of the compensation deal that
was “critical to [its] long term viability and affordability”.

It took some time for the government’s
counter-argument to get through, but a spokesperson for treasurer Peter
Costello nailed the key point straight away: “James Hardie has an absolute obligation to compensate victims of
its products. It has the financial resources to do this and the public
should not be conned to the contrary”.

The prime minister yesterday was equally clear: “they are entitled to the normal tax treatment, but they are not
entitled to shift some of their responsibility to the rest of us
through some kind of special tax deal.” And in this morning’s Australian, legal expert Ian Mutton pointed out that “Hardie was using the tax
issue to try to avoid meeting its full obligations by maintaining a cap
on payments”.

But the initial rush of pro-Hardie publicity showed
how easily the unions and their allies get taken in by big business.
Typically, business tries to sell its special privileges as benefiting
workers, and all too often it gets away with it. Hence manufacturing
unions help to inflate the profits of multinational companies by
defending tariffs, and artists and writers do the same by defending
intellectual “property”. If the trick works this time, Hardie’s
shareholders will be laughing all the way to the bank.

Peter Fray

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