Inequality exists in every economy, but to what extent is income and wealth in Australia unequal and what government policies address income and wealth inequality? Income is defined as the money an individual or company receives in exchange for the provision of a good or service or through capital investment, while wealth is a measure of the value of all valuable assets owned by a person , community, company or country. Income and wealth inequality refers to the degree to which income is unevenly distributed among people in an economy. The share of total income received by different groups measures inequality, visually represented in the Lorenz curve. The line of perfect equality bisects the graph with the percentage of income proportional to the quintiles, where 20% of families represent 20% of the national income, the next 20% of families receive 20% of the income, and so on. However, the distribution of income and wealth in an economy is never ideal, so the Lorenz curve will always exist below the line of perfect equality. For example, in 2009-2010, the top 20% of Australians received 40% of national income, while the bottom 20% received just 10%. This varied in 2012-2013 with Australia's top 20% earning 33% of national income and the lowest income earners achieving a 19% increase from 2009-2010, showing a more equal distribution. Another method to measure inequality is through using the Gini coefficient, it represents the statistical dispersion of the income distribution of resident nations. Australian Gini coefficient trends are a decline from 0.329 in 2009-10 to 0.32 in 2011-12, thus illustrating a reduction in inequality due to tax cuts and increases in welfare... middle of paper... proportionately higher taxes and social benefits, moderating disposable income. When incomes fall during a recession, the impact that falling incomes have on income earners is attenuated because high-income earners pay proportionately less in taxes and retain more after-tax income, while low-income earners receive benefits , thus injecting into the economy and moderating a downturn in the economy, this is a fiscal boost. These macroeconomic strategies were applied in 2008-2009 when the recession of the global financial crisis hit the economy, when the government adopted an expansionary stance to support aggregate demand and production. Inequality is existential in every economy, but with the effective implementation of macroeconomic policy coupled with direct and indirect fiscal policies and the safety net of minimum wages results in a more equitable distribution of income and wealth in Australia.