Those who keep an eye on the ever-rotating carousel of policy theme weeks will be aware we've hit Anti-Poverty Week, capped off by the UN's Day for the Eradication of Poverty.

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No doubt activists across the country marked these important events with a hearty three cheers for capitalism - the single greatest invention for reducing poverty in the history of mankind.

Just kidding. The activist message is overwhelmingly on the need for government to spend more and tax more.

For example, the Anti-Poverty Week website calls for an increase in welfare payments, stronger protections for renters, a massive increase in social housing and cuts to negative gearing and capital gains tax concessions.

In other words, many activists believe poverty is the fault of markets and the only solution is government.

This is just one of many contestable assumptions pervading the debate.

Another important assumption is the very definition of poverty itself. Activists define poverty as the number of people whose income is less than a certain percentage of average wages. This definition is almost ubiquitous in debate; hence news stories this week that one in seven people are living in poverty.

However relative measures like this do not give a complete measure of those in poverty - at least not if you consider poverty in terms of what you can and can't afford.

Unfortunately, few attempts have been made recently to measure incomes against objective standards of poverty in Australia.

International evidence suggests that, when measured against objective standards, poverty is substantially lower than relative measures suggest. It also indicates poverty is falling.

For example, an analysis from Columbia University found that in the US, relative poverty has been slowly but steadily increasing over time, while absolute measures show a significantly larger fall........

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