The projected $594,000 payment covers this year’s contribution alone, and will go towards 29 employees’ eventual superannuation payouts.

The payout covers losses to superannuation stocks hit by the global credit crunch.

The employees were entitled to the ratepayer-subsidised scheme because they were in local government before 1993, when the current nine per cent employer contribution was introduced.

Under the old system still in place for the long-serving staff members, council was obliged to meet and compliment every dollar that was put in to superannuation by a staff member.

Nambucca Shire Council general manager Michael Coulter said the half-million-dollar payout this year would be coming from council’s general fund, ‘which means, unfortunately, it won’t be going into roads or bridges’.

Mr Coulter said local government was not the only level to be suffering from the credit-crunch shortfall, with the State Government putting aside a hefty amount in this year’s budget to deal with its own superannuation liabilities for its staff.

This shock liability for Nambucca Shire Council follows a boom period on the stock market, which gave the council a seven-year ‘holiday’ from paying any contribution at all into the staff superannuation funds.

Mr Coulter said this would not be a one-off payment for council, with ratepayers expected to keep picking up the bill for the scheme’s shortfalls.