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Auditor-General fears public service nest-eggs under a cloud

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The Palaszczuk Government insists its superannuation liabilities are fully funded, but the Auditor-General is not so sure.

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In a report tabled in State Parliament today, the Auditor-General, Brendan Worrall, has reflected on Queensland’s deteriorating budget situation.

The Labor government has gone deeper into debt, drifted further from a surplus and, since the pandemic began, increased expenditure despite poor revenue prospects.

Treasurer Cameron Dick has vowed to steer the course to recovery but first has to find a new Under Treasurer. Rachel Hunter will move across to the Department of Premier and Cabinet in May, ahead of Dick handing down the next budget in June.

A long-standing strength of the Queensland budget has been that superannuation liabilities are fully funded, meaning a surge of retirements and redundancies won’t break the bank.

But while consecutive governments have relied on the State Actuary to declare whether they are fully funded, Worrall said those methods differed from normal accounting standards and relied on expected investment returns.

Worrall said the latest actuarial investigation of QSuper reported a surplus of $3.57 billion “which is substantially higher than that calculated on an accounting basis”.

By Worrall’s calculations, the government’s superannuation liability at the end of June was $27.7 billion, however the economic downturn reduced the value of investments to $26.2 billion – on paper, a $1.5 billion shortfall.

“The increase in the government’s superannuation liability, and the decrease in the value of the investments held, means the extent to which the liability is supported, on an accounting basis, declined by almost $4 billion on the previous year,” Worrall said.

“The Queensland Government needs to ensure that sufficient investments are available to be able to make future payments when they are due.”

The government has previously targeted superannuation holdings to help stabilise the budget.

In his report, Worrall also recommended government financial statements be released by October 31 each year, making them available before the election every four years. Treasury will endeavour to implement the recommendation.

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