The NSW government will provide an extra $106m in support for James Hardie asbestos victims.
The government will remove the re-insurance recoveries loan cap for the Asbestos Injuries Compensation Fund (AICF), which effectively means the fund can borrow up to $320m to ensure victims can continue to be paid lump sums.
The NSW treasurer, Andrew Constance, said the money would help provide certainty for asbestos victims and their families, whether they lived in NSW or any other state or territory.
“While funding the compensation of asbestos victims is morally the responsibility of James Hardie, we are not willing to let a situation arise where those suffering do not get full and up-front payments,” Constance said.
The AICF had raised concerns it would have to pay asbestos victims in instalments because of a shortfall in the timing of funding from James Hardie.
Constance said a 2010 facility agreement was supposed to allow the AICF to borrow $320m from NSW – an amount intended to cover the unexpected downturn in payments from James Hardie as a result of the global financial crisis.
But the loan cap restricts AICF borrowings to $214m – the value of the outstanding insurance policy held by James Hardie.
Just 45% of the payments from the AICF goes to NSW residents.
The NSW premier, Mike Baird, has written to the prime minister, Tony Abbott, saying it is fair and reasonable to expect the Commonwealth, as well as other state and territory governments, to bear their fair share of funding for victims outside NSW.
The AICF was established as part of an agreement with James Hardie in 2005 to provide compensation for asbestos victims.