The tax net widens !

There is no doubt that all forms of government are desperately short of money !

Local government is dismayed by rapidly crumbling infrastructure and new responsibilities dumped on them by state and Federal government.

State governments have devised a plethora of " revenue raisers " which are little short of acts of banditry - and still there is not enough money for a decent health system, road network or the means of getting citizens to and from work on public transport.

The Federal government is about to confront a monster of it's own making. It has borrowed billions to get the country out of recession - and now it has to figure out how to repay that money - and still maintain essential services at the same time.

Ominously, the Federal treasury is " doing exercises " to examine the role the family home could play in the tax system !

The Treasurer has been quick to issue a disclaimer, stating that " he has no intention of changing the tax free status of the family home ", but those are the words of a politician - and one must wonder why Treasury is doing these sums if there is no prospect of them being implemented.

Capital gains tax must loom large in some economist's minds. The recent house price boom saw even a modest suburban home leap to multi digit figures. Surely there must be an upper limit above which a " home " loses tax free status ?

Then there is the " pensioner " option for avoiding tax. A pensioner is means tested on all assets - except the value of the family home. It is possible to trim those assets to the permissible level - and invest the surplus in a mansion and thus preserve the family fortune while still getting the full pension.

The " bean counters " at Treasury are navel gazing a whole lot of " what ifs " and that is bad news for the average citizen. When push comes to shove and the sums do not add up governments have no option other than to embrace harsh measures.

A big hole in the Federal budget looms - most other options have by now been tapped.

The family home seems to be the target of last resort !