New South Wales superannuation asset earnings will be re-calculated using an amended accounting standard, the NSW Treasurer and Minister for Industrial Relations, Mike Baird, told the annual NSW Business Forum yesterday.
It will lead to an extra $1 billion in super asset earnings, he said.
Baird said interest would be calculated in the 18 June State Budget using the Commonwealth’s 10-year bond rate. A similar amendment to the accounting standard has already been introduced in Victoria, which led to approximately $600 million a year extra over forward estimates.
The amendment would affect the operating result but not the cash result or superannuation liability, Baird said.
Softening of NSW tax revenues was also putting pressure on the state’s AAA credit rating, the audience was told.
The Institute of Chartered Accountants head of reporting policy, Kerry Hicks, said the accounting standard change affected the accounting presentation but not the state’s superannuation liability.
“The change will impact all entities that have defined benefit schemes, including corporate businesses,” she said.
“The impact on governments is larger as these types of schemes are more prevalent in the public sector. All State government budgets this year are likely to include the change to the accounting standard.”