❓ Hon. Anthony Fels questions the Treasurer about using the state's surplus to reduce unfunded superannuation liabilities, given a significant increase in revenue. The Treasurer responds that the government prioritises debt reduction and infrastructure investment, as the superannuation liability is capped and expected to decline naturally.
AnsweredQoN 1079Legislative Council
QuestionView source ↗
STATE SUPERANNUATION LIABILITY
I refer to the 2000-01 and 2006-07 state budget papers, which show that the state’s unfunded superannuation liabilities have increased some 27 per cent from $4.521 billion as of 30 June 1999 to $5.751 billion as of 30 June 2005. Given that the first two months of this financial year have witnessed a 17 per cent increase in government revenue, a record July surplus of $360 million and a trend in revenue that, if continued, will translate into a whole-of-year surplus of $4.3 billion, will the Treasurer consider using some of the projected windfall surplus to reduce the state’s $5.751 billion unfunded superannuation liability; and, if not, why not? Hon LJILJANNA RAVLICH
I refer to the 2000-01 and 2006-07 state budget papers, which show that the state’s unfunded superannuation liabilities have increased some 27 per cent from $4.521 billion as of 30 June 1999 to $5.751 billion as of 30 June 2005. Given that the first two months of this financial year have witnessed a 17 per cent increase in government revenue, a record July surplus of $360 million and a trend in revenue that, if continued, will translate into a whole-of-year surplus of $4.3 billion, will the Treasurer consider using some of the projected windfall surplus to reduce the state’s $5.751 billion unfunded superannuation liability; and, if not, why not? Hon LJILJANNA RAVLICH
AnswerView source ↗
I thank the member for some notice of this question. The government has chosen to use the recent strong surpluses to invest in infrastructure and reduce debt. Over the past two years the government has applied $2.4 billion in surplus consolidated fund cash to debt reduction, leading to interest savings of about $150 million a year. As a result of the strong surpluses achieved and the government’s focus on debt management, the state’s net debt reached a record low at 30 June 2006. Applying surplus cash to paying off debt was considered a better option than using that cash to reduce the state’s superannuation liability. This reflects the fact that the superannuation liability has now been effectively capped with the full concurrent funding of the only superannuation scheme still open to new members, West State Super. As members of the now closed unfunded superannuation schemes retire, the state’s superannuation liability will automatically reduce. Reflecting this, the liability is projected to decline to an immaterial level over the next 20 years.
Hon LJILJANNA RAVLICH replied: I thank the member for some notice of this question. The government has chosen to use the recent strong surpluses to invest in infrastructure and reduce debt. Over the past two years the government has applied $2.4 billion in surplus consolidated fund cash to debt reduction, leading to interest savings of about $150 million a year. As a result of the strong surpluses achieved and the government’s focus on debt management, the state’s net debt reached a record low at 30 June 2006. Applying surplus cash to paying off debt was considered a better option than using that cash to reduce the state’s superannuation liability. This reflects the fact that the superannuation liability has now been effectively capped with the full concurrent funding of the only superannuation scheme still open to new members, West State Super. As members of the now closed unfunded superannuation schemes retire, the state’s superannuation liability will automatically reduce. Reflecting this, the liability is projected to decline to an immaterial level over the next 20 years.
I thank the member for some notice of this question. The government has chosen to use the recent strong surpluses to invest in infrastructure and reduce debt. Over the past two years the government has applied $2.4 billion in surplus consolidated fund cash to debt reduction, leading to interest savings of about $150 million a year. As a result of the strong surpluses achieved and the government’s focus on debt management, the state’s net debt reached a record low at 30 June 2006. Applying surplus cash to paying off debt was considered a better option than using that cash to reduce the state’s superannuation liability. This reflects the fact that the superannuation liability has now been effectively capped with the full concurrent funding of the only superannuation scheme still open to new members, West State Super. As members of the now closed unfunded superannuation schemes retire, the state’s superannuation liability will automatically reduce. Reflecting this, the liability is projected to decline to an immaterial level over the next 20 years.
This reflects the fact that the superannuation liability has now been effectively capped with the full concurrent funding of the only superannuation scheme still open to new members, West State Super. As members of the now closed unfunded superannuation schemes retire, the state’s superannuation liability will automatically reduce. Reflecting this, the liability is projected to decline to an immaterial level over the next 20 years.
Hon LJILJANNA RAVLICH replied: I thank the member for some notice of this question. The government has chosen to use the recent strong surpluses to invest in infrastructure and reduce debt. Over the past two years the government has applied $2.4 billion in surplus consolidated fund cash to debt reduction, leading to interest savings of about $150 million a year. As a result of the strong surpluses achieved and the government’s focus on debt management, the state’s net debt reached a record low at 30 June 2006. Applying surplus cash to paying off debt was considered a better option than using that cash to reduce the state’s superannuation liability. This reflects the fact that the superannuation liability has now been effectively capped with the full concurrent funding of the only superannuation scheme still open to new members, West State Super. As members of the now closed unfunded superannuation schemes retire, the state’s superannuation liability will automatically reduce. Reflecting this, the liability is projected to decline to an immaterial level over the next 20 years.
I thank the member for some notice of this question. The government has chosen to use the recent strong surpluses to invest in infrastructure and reduce debt. Over the past two years the government has applied $2.4 billion in surplus consolidated fund cash to debt reduction, leading to interest savings of about $150 million a year. As a result of the strong surpluses achieved and the government’s focus on debt management, the state’s net debt reached a record low at 30 June 2006. Applying surplus cash to paying off debt was considered a better option than using that cash to reduce the state’s superannuation liability. This reflects the fact that the superannuation liability has now been effectively capped with the full concurrent funding of the only superannuation scheme still open to new members, West State Super. As members of the now closed unfunded superannuation schemes retire, the state’s superannuation liability will automatically reduce. Reflecting this, the liability is projected to decline to an immaterial level over the next 20 years.
This reflects the fact that the superannuation liability has now been effectively capped with the full concurrent funding of the only superannuation scheme still open to new members, West State Super. As members of the now closed unfunded superannuation schemes retire, the state’s superannuation liability will automatically reduce. Reflecting this, the liability is projected to decline to an immaterial level over the next 20 years.
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