Delaying $3 billion in superannuation payments to Victorian public service workers will push up net debt $882 million by 2035, the Parliamentary Budget Office says.
Treasurer Tim Pallas last year announced the Andrews government would delay $3b in payments to the closed defined benefit superannuation scheme from 2023 to mid-2027.
The scheme, which the government has committed to fully funding by 2035, was set up to meet Victoria’s unfunded superannuation liabilities from the 1990s.
Analysis from the independent budget office, requested by Victorian Opposition Leader John Pesutto, estimates the policy will increase Victoria’s net debt $882.8m by mid-2035.
“The policy requires higher cumulative investments in superannuation assets from 2027/28 to 2034/35,” the report said.
The Victorian budget handed down in May forecast net debt to hit $171b by mid-2027.
In a bid to rein it in, the Andrews government unveiled a $31.5b COVID-19 debt levy on big business and property investors.
Opposition finance spokeswoman Jess Wilson accused the Andrews government of playing accounting games to deceive taxpayers and ratings agencies.
“As a result of the Andrews government kicking its super payments down the road, Victorian taxpayers will be left almost $900 million worse off,” she said in a statement on Sunday.
“Delaying these payments was wrong and a blatantly political decision that has come at an enormous cost to Victorian households and businesses.”
Deputy Premier Jacinta Allan was making no apology when asked if it was a wise move, noting the policy was outlined before the state election and confirmed in the state budget.
“Those settings have not changed,” she told reporters.
The budget office conceded the estimate was subject to large uncertainties and highly sensitive to assumptions from treasury and itself.
“While we expect this policy would have a negative impact on the budget in the longer term – it would increase net debt to fund the government’s superannuation liability,” it said.
“This overall effect is relatively small, compared to the annual movements, and could be significantly impacted by changes in these assumptions.”
