Council rates.

For decades private home owners have been protected from huge council rate increases by a government edict which capped rises annually to on or near the rate of inflation.

The New South Wales government is considering scrapping that restraint.

This could not come at a worse time. It is inevitable that we will soon see a sharp rise in job losses and the last thing unemployed home owners need is a surge in council rates as they try to cope with mortgage payments and living expenses on the dole.

To add to their misery, this same government is thinking of abolishing payroll tax exemptions for councils.

Payroll tax was a " temporary " war time tax that has never been rescinded. It works on the principle that anyone running a business is rich - and essentially is a penalty for employing people. It's removal would cost councils a huge operating cost increase - and put added pressure on rates.

At least these suggestions provide a valid reason for having a long, hard look at the sustainability of the third tier of government.

All the councils in this state are funded below sustainability to service existing infrastructure, let alone provide additional services. Both the Federal and state government's have offloaded previous responsibilities onto local government - without providing any financial support. As a result, councils are in crisis.

There is a huge list of property owners who are exempt from paying council rates. Federal and state departments such as schools and hospitals get a free ride - and all the churches are rate exempt.

The time has come for a restructure of the financing of local government. There is no reason why all occupied land should not pay rates and if that happened the rate burden would be evened out for individual home owners.

Local government should also get a share of Goods and Services Tax (GST ) because this is the fairest of all the taxes levied.

The GST is not levied in proportion to income level - as is income tax - but is paid by everyone - local citizen or tourist. It is not concerned with the source of income. If money is obtained illegally tax is still collected by GST the moment that money is spent - hence it is a universally applied form of tax.

The suggestion of uncapped rates and councils paying payroll tax will only further impoverish citizens - and drive many out of home ownership.

There simply has to be a better way - but unfortunately progressive, forward thinking seems beyond the capacity of the politicians we have voted into office !