When we think about poverty, we don't think of Australia.

We pride ourselves as being lucky - as an extremely safe and peaceful country, with a comprehensive welfare system, schools and hospitals available to everyone and a GFC-resistant economy.

Average disposable incomes here are about $40,000 a year, well above the OECD average of about $30,000.

Poverty is something that developing countries have to deal with. Or places such as the United States that don't have the same social safety nets as we do.

And yet, research released by the Committee for Economic Development of Australia on Tuesday finds that 4 to 6 per cent of Australians - that's between one and 1.5 million of us - live in poverty, with little hope of escaping it.

CEDA has described it as a "disgrace", noting that this comes on top of more than two decades of national economic growth.

There are several ways of defining poverty.

Looking at incomes, the Australian Council of Social Service found that the threshold for poverty in 2011-12 was a disposable income of less than $400 a week for a single adult. On this measure, as many as 2.55 million Australians live in poverty.

The CEDA report uses a combination of two other methods to come up with its million-person figure.

It first looks at the "deprivation" approach, which considers whether people have access to necessary goods and services.

A 2010 survey found that 18 per cent of Australians did not have up to $500 in savings in case of an emergency. Thirteen per cent did not have enough for dental treatment if needed, while 8 per cent did not have enough for an annual trip to the dentist for their children.  Ten per cent did not have home contents insurance, and 20 per cent were unable to afford a week's holiday away from home each year.

The second approach looks at social exclusion across different categories from employment to material resources, health, safety and education. Research by the Brotherhood of Saint Laurence and Melbourne University found that about 5 per cent of Australians faced "deep social exclusion" and another 1 per cent found "very deep social exclusion" in 2012.

It is difficult to say whether the problem is getting worse.

ACOSS's 2014 poverty report - which uses an incomes approach - found there was a small increase in the numbers of all people and children specifically who were living below the poverty line between 2010 and 2012.

But the CEDA report explains this is a hard question to answer precisely, because of changes in the way the Australian of Bureau of Statistics collects data on household incomes and because of other changes in information collection.

Data comparability is also a problem at an international scale, where the OECD in 2012 ranked Australia 25th, with nine other wealthy nations having a worse poverty rate, including Korea, Japan, Spain and the United States.

However, the more important question is why so many people are falling through the cracks despite so many years of prosperity. As more people take overseas holidays and increase the size of their flatscreens, why can't some of us can't even afford to get a toothache looked at?

CEDA argues that governments of all colours and stripes have been too fixated on using the "big stick" approach in trying to force people to get a job (the Abbott government's proposed six month dole wait being a classic example).

It argues instead that more focus should be put on programs such as early intervention for those with mental illness. And for children from disadvantaged families to be helped and specially funded so that they do not start school behind and do not keep going through their lives behind their peers.

It also talks about reducing discrimination against Indigenous people in the job market. There are "wage and employment differentials which cannot be explained by educational gaps or other factors" it warns.

The government is currently reviewing the childcare and welfare systems and is just weeks away from handing down its second budget.

You can bet your entire disposable income that in all of this, there will be a huge focus on getting disadvantaged young people, young mums and older workers into work and that it will be argued "the best form of welfare is a job".

But as the policy debate continues, the bottom line is one million people living in poverty in the lucky country doesn't make sense.

And it's not good enough.

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