Nov 2, 2012

That’s not a budget black hole, this is: NSW super blowout

Forget the $1 billion hole in the NSW budget; there's a $21 billion black hole in the state government's employee superannuation scheme. And it looks like getting worse.

Glenn Dyer — <em>Crikey</em> business and media commentator

Glenn Dyer

Crikey business and media commentator

Forget the argument about whether NSW has a budget deficit or a surplus, the real concern should be the $21 billion black hole in the state government’s employee superannuation scheme. So large was the shortfall in the 2011-12 year that the NSW government had to borrow $800 million to try and stabilise the situation.

In fact the government pumped a total of $4.6 billion into the super fund in the year to June, yet the black hole grew by almost 49.5%, or $16.9 billion last financial year. That brings it to a total of $21.6 billion, the highest the shortfall has been. According to the latest report from the NSW Auditor-General the culprits were falling bonds yields, the weak sharemarket and a sluggish economy. With interest rates still falling in the current financial year, and expected to fall again over the course of the next few months, NSW faces the rising chances of another substantial shortfall for the 2013 financial year and the likelihood that it will have to borrow for a second year to fill some of the black hole.

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One thought on “That’s not a budget black hole, this is: NSW super blowout

  1. Edward James

    Is this what prompted the remark; Like it or lump it ? Edward James

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