Liberal Party’s plan to tackle the state’s unfunded superannuation liability using GST

The Liberal Party says it would use a part of future GST windfalls to tackle the state’s unfunded superannuation liability. How it would work.

A future Liberal government would pass laws to ensure future government used a proportion of future GST windfalls to pay down the state’s unfunded superannuation liability – that costs Tasmanians more than $350 million a year.

The state government owes an estimated $8.3bln to retired public servants on old defined benefit schemes.

The cash reserves used to cover the debt were spent by a previous government.

“When Labor was last in government, they notoriously raided the $1.5 billion Superannuation Provision Account (SPA) to prop up their budget failures,” Premier Jeremy Rockliff said.

Premier Jeremy Rockliff in Moonah. Picture: Nikki Davis-Jones

“A decade later, Tasmanians are still paying the price for a Labor Government’s appalling budget mismanagement, effectively stealing from future generations to pay for their own mistakes.

“Last year, it cost more than $350 million out of the budget to cover Labor’s superannuation liability and this will only get worse, rising to close to $500 million in 2035 and remaining a burden on our public purse until 2080.

“This is what happens when you give Labor control of the state’s purse strings – they are reckless, irresponsible and it takes decades to fix their mess.

Mr Rockliff said the new law would mandate 50 per cent of any GST windfalls, over and above Treasury’s Budget forecasts, go directly into a new legislated mechanism, offsetting the Retirement Benefit Fund’s liabilities.

“This will effectively reverse Labor’s scrapping of the SPA,” he said.

“This will mean we pay less on the cost of servicing Labor’s unfunded super liability, and the funds would be protected from future smash and grabs.”

“This is a lot like putting any extra money into an offset account attached to your mortgage – every extra dollar you can chip in means you pay less interest on your loan.

Originally published as Liberal Party’s plan to tackle the state’s unfunded superannuation liability using GST