Income distribution can be considered one of the key responsibilities of government due to the potential effects it can have on the nations population, economy and growth. It is commonly debated about the ‘fairness’ of income distribution and what can be done to increase equality amongst all classes of society. This report will argue that the current distribution of income in Australia is not ‘fair’, and that the gap between the top and bottom level income groups can, and should be reduced. It will provide a detailed synopsis on what income distribution is, and the level of income inequality in Australia, with methods to increase equality in distribution of income detailed throughout the report.

Income distribution is “national income divided …show more content…
Arguably the most well-known and powerful force from this selection is the trade union movement. Unions attempt to foster equality in a number different ways. One of the ways in which unions reduce the pay gap is pushing hard to increase the earnings of the lowest paid employees within an organisation. This is usually achieved by demanding fixed dollar pay increases as opposed to percentage increases. They also attempt to “tip the scales towards workers” by increasing the wage ill and reducing profits received by the organisation. Unions also attempt to reduce the wages of top-level managers and influence redistribution of funds through the political system. Although unions have been effective in the past, union memberships are declining in Australia to a record all time low, with only one in nine private sector employees choosing to belong to a union. Overall union membership has dropped from forty percent of the workforce down to approximately fifteen percent over the last twenty years. As aforementioned education is a factor that contributes to inequality in Australia, however it is has been addressed by the government and is now a method used to increase equality. The intent is to ensure that kids are leaving school on a ‘level playing field’ as to prevent …show more content…
The taxation system and the transfer system come under the same scheme, however they are administered independently and differ in a number of important ways. Transfer payments are defined in the Commission paper as “cash payments provided by government to individuals and families.” In order to receive these payments, income and asset tests are conducted on the individual or family to deme if they are eligible or not. These payments come in four different types under the Australian system: pensions, allowances, supplementary payments, and family