Mesothelioma- the Financial Costs to Society
Mesothelioma- the Financial Costs to Society
Much has been written about asbestos related diseases such as
Mesothelioma over the last couple of years. The focus has been
on three main areas:
a) The unfortunate victims of mesothelioma such as former
employees of asbestos mining companies who caught these diseases
whilst in the course of their employment. We have seen the heart
rendering images on TV of these people, all of them in their
retirement years, gasping for air and suffering enormously.
b) Whether the asbestos mining companies knew that asbestos
mining was a danger to human life.
c) The Multibillion dollar class actions filed by the victims
against their former employers seeking compensation.
Two issues that have not been addressed are the financial costs
to society of asbestos related diseases such as Mesothelioma
cancer and who pays for these costs. Secondly, should asbestos
mining companies be paying compensation not only to the
sufferers of mesothelioma and other diseases but also to Society
also?
There are two costs to society that can be identified. The first
is the cost to the public health system. The second cost is the
loss of tax revenue by governments due to Asbestos mining
companies claiming a tax deduction for the compensation payments
that are made to the victims.
In illustration of the costs to the public health system, the
Asbestos Diseases Foundation of Australia has stated that by
2020 there will be 13000 cases of mesothelioma and 40000
asbestos related lung cancer diseases, totaling 53000 people and
this is only in Australia! This means that 53000 people will
need to have constant medical attention for the next 15 years or
so. The question therefore, who pays for the cost? The answer of
course is the current taxpayer and the next generation of
taxpayers.
In relation to tax revenue, governments are essentially missing
out on tax revenue as the asbestos companies are claiming the
compensation payment as a tax deduction. For illustrative
purposes, assume that an asbestos mining company pays out $100m
per year over five years to the victims. Also assume that the
corporate tax rate is 30 per cent. Therefore over five years, a
respective government is losing $150m in revenue. Essentially it
means that the asbestos mining companies are sharing the costs
with the taxpayer. They pay 70 per cent of the compensation
payment and the taxpayer pays the remaining balance. Most people
would view this as totally inequitable.
It can be seen that the Asbestos companies are only paying a
part of the costs and not the full cost. To rectify this, there
are two possible solutions.
a) Respective Governments should also join class actions with
Mesothelioma sufferers against the asbestos mining companies
seeking compensation for medical and future medical costs. This
would not be unprecedented as various State Governments of the
United States sought compensation against the Tobacco Companies
to pay for the medical costs of its citizens who needed medical
attention because of the ill effects of smoking.
b) Governments deny a tax deduction for Mesothelioma
compensation payments made by the asbestos mining companies.
Until either part a or part b happens, it is the taxpayer who
will be unfairly burdened with the additional financial costs of
Asbestos related diseases such as Mesothelioma.