Australian Government Intervenes in the Economy Essay

Australian Government Intervenes in the Economy - Essay ExampleAside from merchandise failures, the government also intervenes to achieve equality through the reallocation of resources and redistribution of income (Stiglitz, 2002). This last impetus for the government to interfere in the market economy is the focus of this paper. We willing take a particular look at the Australian government and its various ways of intervening in the market to improve its outcomes with a precise focus on reallocation of resources and redistribution of income.A study of the Australian National Universitys Centre for Economic Policy Research highlighted the income inequality in Australia. The study revealed that interpreted overall, the 60 years from 1921 were apparently a stoppage of major decline in the share of income going to the wealthiest taxpayers (Michaels, 2006). By 1980, the share of the top 1% hide from 10% of the total income to 5%, the 0.5% fell from around 9% to 2.95% and the top 0.1 % was cut down from 4% to approximately 1% (Michaels, 2006). ... er the same period and the share of the top 0.1 percent, which had fallen to approximately 1 percent of the total in the 1980s, more than doubled to over 2 percent by the oddity of the 1990s (Michaels, 2006). The introduction of the imputation system in which part of corporation tax paid is treated as a pre-payment of personal income tax has exacerbated the inequality (Michaels, 2006). earliest Redistribution ActivitiesAustralia government depended on three redistribution methods the progressivity of the taxation system the distribution of government cash payments and the absolute level of government in-kind and cash payments (Robinson, 2007). From 1910 to 1940 per capita levels current of Australian social expenditure in 1911 prices rose 208% substantially more than Butlins estimate for GDP growth in 1911-39 of 48%. The introduction of aged pensions, the maternity premium and repatriation run saw the Commonwealth take a leading position in overall social expenditure, in particular cash payments to individuals, but the states remained prevailing in the delivery of in-kind services, particularly education and health and NSW from 1927 introduced leave behinds pensions and child endowment (Robinson, 2007)Australian government has given much in terms of pension and reparation. Excluding the NSW widow pensions, pension and reparation became the governments responsibility in which the distribution is allocated per capita among the census category of Pensioners as identified in the census (Robinson, 2007). There were also in-kind government services which is composed mainly of health and education and administered by the state in proportion to their population (Robinson, 2007). The government also resported to cash payments, although it covered only a small