The Australian Government intervenes for several of reasons in the economy to address failures in the free market. The government uses various methods or intervention in order to allocate resources , the distribution of income and the economic stability.
             The Australian government intervenes in the economy because the free market does not always provide the most efficient allocation of resources for the economy. There are many reasons that show this, the government does this so it can provide important things that would not otherwise be provided. They do this because some necessity's and goods and services may not be provided under a pure market system. The government does this so it can look after the economy much better and sometimes better for essential goods and services to be provided by the government. A great example of this would be the defence force, it is more safer to have a defence force in the hands of the government rather than to have a system of private armies.The government also provides regulations to prevent producers from exploiting consumers with misleading information or by agreeing to raise prices. That is one way the government intervenes in the Australian economy.
             Secondly the government intervenes in the Australian economy is in the distribution of income. Because the free market will not necessarily provide a socially desirable or fair distribution. They do this so people are able to live so the rich don't get richer and the poor don't get poorer. The government does this through social welfare payments and progressing income tax. Therefore social welfare payments is when the government redistributes income by taxing people on higher incomes more heavily than a person earning 'ends meat', and this money is redistributed back into the economy to the members that don't contribute to the production process. Some examples of the social welfare payments are disability pensions,...