Statist idiots: OZschwitz governments face $140b blowout in super deficit

THE unfunded pension liabilities of Australia's six state governments have blown out by $40 billion to more than $140 billion over the past year, increasing pressure on some to inject funds into the schemes.

Statist idiots: OZschwitz governments face $140b blowout in super deficit Artbowlgraph2620x349

The blowout for schemes that cover retirement savings for police, teachers and healthcare workers, comes as many states are already battling softer than expected tax revenue mostly due to sluggish property markets and to payroll taxes falling on weaker job markets.

But the shortfall has increased over the past year due to a dramatic collapse in Commonwealth government bond yields, which means the assets in the state-backed pension schemes are now forecast to earn a fraction of previous estimates.

State-backed pension programs typically invest in fixed-income assets such as government bonds and cash. But this means the scheme underwriter - in this case the state governments - are often left to cover the difference when investment returns fall short. Although with the long-term nature of the liabilities - with some payments still decades out - credit ratings agencies and financial markets generally look through the deficits sitting on state balance sheets.
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Read more: http://www.smh.com.au/business/state-governments-face-40b-blowout-in-super-deficit-20130120-2d16s.html#ixzz2IYktVKBx

Statist idiots: OZschwitz governments face $140b blowout in super deficit

Statist idiots: OZschwitz governments face $140b blowout in super deficit

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