Almost one in seven Australians are living below the poverty line and now the Australian Council of Social Service fear that federal budget measures will make it worse.

ACOSS has released a report revealing poverty is growing in Australia, with an estimated 2.5 million people, or 13.9 per cent, living below the internationally accepted poverty line.

It also found 603,000, or 17.7 per cent, of all children are living in poverty.

Almost one in seven Australians are living below the poverty line

The social problem is particularly stark in NSW, which has the highest proportion of people facing hardship with some 868,373 people living below the poverty line.

'This is alarming and highlights the need for a national plan to tackle the scourge of poverty which diminishes us all in one of the wealthiest countries in the world,' ACOSS CEO Cassandra Goldie said on Sunday.

'This finding brings into focus the sheer inadequacy of these allowance payments, which fall well below the poverty line.'

Dr Goldie said there were two critical ways government policy could alleviate poverty: housing and basic income support.

'Thirty-six dollars a day is not enough security - there is a real risk of poverty while struggling on the Newstart allowance,' Dr Goldie said.

The poverty line for a single adult is $400 per week yet the maximum rate of payment for a single person on Newstart is $501 a fortnight.

The report found those most likely to be living in poverty are people who are unemployed

ACOSS has released a report revealing poverty is growing in Australia, with an estimated 2.5 million people, or 13.9 per cent, living below the internationally accepted poverty line

When Rent Assistance and other supplementary payments are added, it's only $303 per week.

That's $97 per week below the median income poverty line.

The report found those most likely to be living in poverty are people who are unemployed (61.2 per cent) and those in households that rely on social security as the main source of income (40.1 per cent), particularly on Newstart.

Dr Goldie said the report emphasised dangers in the federal budget, including plans to reduce indexation of pension payments.

'(This) is likely to result in higher poverty rates over time,' she said.

'These overall findings are a wake-up call for us as a community and shine a spotlight on the current policy direction of the federal government.

'It provides an opportunity for the government to work with the whole community to reconfigure its first budget and national policy priorities around the urgent need to address poverty in Australia.'

Meanwhile, the Governor-General Peter Cosgrove has called on his fellow country men and women to help Australians plagued by the "insidious and all encompassing" problem of poverty.

Sir Peter said the problem of poverty did not discriminate.

He told the launch of Anti-Poverty Week in Sydney poverty was insidious and all encompassing because it deprived people of a choice.

'It deprives them of their freedom and assaults their dignity. As a nation we can't allow it to continue,' he said on Sunday.

The Australian Council of Social Service fear that federal budget measures will make it worse

The risk of poverty is greater outside capital cities in most states and territories (especially in Queensland and Tasmania), in part due to higher unemployment in regional Australia, the report says.

The exceptions are NSW and Western Australia, where very high housing costs in the capital cities have increased the risk of poverty.

Anti-Poverty Week chair Julian Disney said there was many areas of disadvantage, not just lack of income, including disability and mental health.

He stressed the need to provide some vulnerable people with deep, life-long support.

'We ...shouldn't fool ourselves that just giving them some money and education and patting them on the back will be sufficient,' he said.

'Many of the disadvantages are much deeper than that." Salvation Army Moneycare financial counsellor Lisa Ross said it doesn't take much for someone to suddenly find themselves below the poverty line.