In a scathing report on Labor's mismanagement of Victoria's finances, the Auditor-General confirmed the Allan Labor Government contributed $221 million less than budgeted to the State Superannuation Fund.
This comes after Minister for Finance, Danny Pearson, in 2023 deferred a $3 billion contribution to Victoria's unfunded superannuation liability to 2027 without explanation, which resulted in losing around $883 million from investment returns on this deferred contribution according to the Parliamentary Budget Office.
It has now been revealed in a Ministerial Brief obtained under FOI by the Victorian Liberals and Nationals that the Department of Treasury and Finance warned the Allan Labor Government of the significant financial risk to defer contributions to the superannuation scheme.
The Department of Treasury and Finance warned "the deferral of payments will significantly increase the superannuation top-up payments that are required beyond 2026-27. This is primarily due to the loss of investment earnings on the $3 billion that would otherwise have been paid to ESS Super over this period", and that Labor's plan to defer contributions represented "a $400 million reduction relative to the previously approved 2022-23 Budget estimate".
In 2000, the former Bracks Labor Government committed to fully fund the liabilities of the State Superannuation Fund by 2035, which is now less than 10 years away.
In order for Labor to meet its promise to fully fund its superannuation liability by 2035, it will need to increase contributions by more than $2 billion each year, according to the Victorian Auditor-General's Annual Financial Report, significantly more than Labor's current forecast payment plan of approximately only $500 million annually.
Shadow Minister for Finance, Bridget Vallence, said: "The Allan Labor Government's failure to fund billions toward its superannuation liability is sheer economic vandalism, putting the retirement savings of public sector workers at risk."
"Labor recklessly ignored the warning from its own Department of Treasury and Finance of the significant financial risk to defer billions in contributions to the State Superannuation Fund.
"Not only is Labor refusing to properly fund superannuation entitlements of Victorian workers now, they will likely have to borrow billions more to fund it in future years, adding to Victoria's growing debt crisis.
"Labor's financial mismanagement and waste has left Victorians paying the price. It's time for a fresh start with responsible economic management under a Wilson government."
