Super hole threat to City’s’ services

Andrew Mathieson
Geelong’s council could slash services to cover a shortfall in staff superannuation from the international financial crisis, a councillor warned yesterday.
Stretch Kontelj expected million of dollars in losses amid a 30 per cent plunge in the value of superannuation funds.
“There’s no doubt the local government superannuation funds are going to take a big financial hit,” he said.
“What that means is that council will have to make up the shortfall somehow.”
Cr Kontelj said ratepayers would suffer from the global credit squeeze but opposed new rate hikes to cover council losses.
“We’ll have to look at every line item of expenditure and look at whether there needs to be some re-adjustment.
“There is a fine line of income that comes in and that’s going to have to make do because I would also be against borrowing, as it’s false economy – that has happened in the past.”
Council was still waiting for the proceeds from sales of several assets to include in future budgets, he said.
The City faced a similar superannuation shortfall in 2001 when council was forced to “find some millions”.
Cr Kontelj said council borrowed up to $5 million to cover the 2001 shortfall but believed minimising debt was now a higher priority.
However, City corporate services general manager Stephen Griffin said staff superannuation fund Vision Super had advised that “extraordinary contributions” were unnecessary.
Mr Griffin said Vision Super was apparently performing in “the top tier of results” based on industry standards.