VINCENT city council will raid interest earnings of $745,352, accummulated from its aged persons and senior citizens reserve over the past five years, to offset its surprise budget deficit.
The council’s financials are in deep trouble after $3.2 million listed as a surplus was found to be a deficit.
The transfer was approved at a special council meeting earlier this month.
It leaves $2.87 million in the account.
Former Vincent councillor Dudley Maier says the council also has to take inflation into account.
“If you look at the seniors reserve and you go back to 2009/10 it started off that year with $2.48m in reserve,” he said.
“If you go to the ABS and look at the effects of inflation that equates to $2.83m in today’s dollars—that’s $350,000 more.
“So essentially you need $350,000 more in that reserve just to maintain the purchasing power.
“The reason you put the interest in is to increase the value of that nest egg, but also to maintain the value of that nest egg and counter the effect of inflation.”
by STEPHEN POLLOCK
Perth Voice Interactive 
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