Council super deficits are local government's responsibility: Crean
 Baw Baw News  

By // 17:34, Monday 25 February 2013

Simon Crean Warragul Citizen feat

VICTORIAN councils handed multimillion-dollar superannuation bills last year should not expect federal assistance, says Minister for Regional Australia, Regional Development and Local Government Simon Crean.

Video: Minister for Regional Australia
Regional Development and Local Government Simon Crean interviewed by The Warragul Citizen about the Defined Benefits Superannuation Scheme.

Important: This video has an HD option. To change the video quality click on the cog that appears in the bottom-right of the video screen when you mouse over the video.


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Find out more about the Local Authorities Superannuation Fund:

In the deep end with Baw Baw.

Late last year the Baw Baw Shire Council was asked to pay almost $4 million by July this year to a superannuation fund, far higher than estimate provided by fund manager Vision Super.

Mr Crean told The Warragul Citizen the proper management of the fund was the responsibility of the council.

“I think every council, every business that has responsibility for superannuation has to manage those accounts properly,” Mr Crean said.

“The contributions are the members’ contributions in the main now and their accumulation accounts, the old schemes, are what every responsible authority has got to make provision for.

“The easy flick-pass is to say someone else should contribute, but I think the councils have got a responsibility to face up to the issue themselves.”

The fund, the Local Authorities Superannuation Fund, was closed in 1993 by then-Victorian Premier Jeff Kennett and legislation requires councils keep it fully funded.


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Baw Baw was one of many Victorian councils to be handed a multi-million dollar bill last year.

A spokesperson for Victorian Minister for Local Government Jeanette Powell told The Warragul Citizen the minister had written to Mr Crean asking him “to consider options to limit the effect of the superannuation shortfall on councils.”

As of October last year the discussions were ongoing, but the spokesperson played down the role of the Victorian Government in helping councils.

“The Defined Benefits Superannuation Scheme operates under federal legislation and is regulated by the Australian Prudential Regulatory Authority. As a consequence, any changes would have to be made by the federal government.”

Mr Crean said council superannuation payments were never a commonwealth responsibility.

“The government has got limited resources and it’s got huge demands and I think the answer to all these things isn’t to say ‘it’s your responsibility’ and us say back ‘no it’s yours,'” Mr Crean said.

“I think there’s a requirement for partnership, but in the case of the superannuation defined benefit it was never the commonwealth’s responsibility in terms of what councils did with their own employees.”

Municipal Association of Victoria President Councillor Bill McArthur told The Warragul Citizen legislation needs to be changed to prevent more issues with the fund in the future.

“That is not an easy task, it needs agreement of the state and it then needs to be agreed to by the commonwealth at the same time.”

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