A Turnbull government minister has taken the novel approach of changing the definition of poverty to reject the widely-held conclusion that inadequate unemployment benefits are one reason many Australians are poor.

The idea that poverty can be defined away might disturb many, but human services minister Alan Tudge’s speech this week earned him an extended herogram from radio ranter Alan Jones, who told his listeners the minister was “1000 per cent” right.

“This is an outstanding speech ... you made the very valid point, we are one of the richest countries in the world, we’ve experienced 25 years of uninterrupted economic growth but impoverishment still exists. And it’s not a function of welfare you say, but of dysfunctional families,” Jones swooned.

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Welfare advocates, business leaders and economists have long made the more obvious point, that the problem lies in the fact that, despite 25 years of uninterrupted economic growth, unemployment benefits have not increased since 1994 and now sit well below the poverty line, at a level that makes it almost impossible for recipients to pay for basics such as shelter and food. Even the Business Council of Australia has argued benefits are so low they act as an impediment to unemployed people getting a job.

But Tudge rejects the whole idea that we should measure poverty as a percentage of a country’s average household earnings, such as the OECD’s benchmark of 50% of median income, which puts 3 million Australians, including 731,000 children, below the poverty line.

He says a relative measure like that means that if we have any level of wealth inequality, some of us would be deemed to live in poverty, even if we were all very comfortable in absolute terms.

Instead he proposes a new definition – “absolute deprivation” – a measure of whether people can afford the basics, such as food, clothing, shelter and education, compared with how much they might have had to spend in the past.

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Comparing welfare payments now to those 30 years ago – when Bob Hawke declared that no Australian child would live in poverty by 1990 – he concludes a single unemployed person is about 10% better off in absolute terms, and families with children are further ahead.

About half of those 3 million Australians living under the poverty line on the OECD measure are on social security payments, which strongly suggests one cause of the problem. But under the new Tudge “absolute deprivation” definition, hey presto, the problem has nothing to do with the level of government payments at all. It’s entirely caused by the “dysfunction” of the families.

(Jones suggested such families should no longer get welfare at all. “We should say, well look, one child I can understand, but two, I’m sorry. If you don’t have a job there’s no welfare for two, three, four, five, 10 and 11.” That was a proposition apparently one step too far for the minister, who responded with a slightly awkward silence).

Of course, by the minister’s logic, had he measured “absolute deprivation” against the level of benefits available during the 1930s depression he could probably have concluded that today’s unemployed are living like kings.

Or, had he measured today’s payments against benefits available at the time of those increases during the Keating years, he would have been forced to conclude that the real level of benefits was declining.

And that’s before taking into account the cost of housing and energy, rising in recent years at much higher rates than overall inflation (the measure used to make the “real terms” adjustments) and comprising a greater proportion of a low-income household’s spending. And it’s before considering the cost of things modern families might need to function and raise children, that 1980s families did not, such as access to the internet.

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Alternatively, he could have stopped trying to define away a problem and considered the real world, where an unemployed person needs to exist on $38 a day and where more than half of single parents responding to a survey said they struggled to pay for food and the things their children needed for school.

Until recently, the inadequacy of these payments was accepted pretty much across the board. It was the conclusion of numerous cross-party parliamentary committees, multiple inquiries and the Henry tax review, which recommended Newstart be increased by $50 a week.

And the minister’s intervention comes as both major parties are moving in response to mounting electoral concern with rising inequality. Bill Shorten is shifting in a decisive way, arguing that growing inequality threatens the economy and social cohesion, and hints that he will look at policies that may have been in the “too hard basket” for many years.

Malcolm Turnbull is less sure how to navigate the winds of electoral change, veering from a budget “based on fairness”, Gonski 2.0 education spending and a newfound fondness for industry intervention, to pledging to press ahead with tax cuts for the biggest companies in the country.

But neither has promised to increase welfare payments.

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Shorten’s Labor has, with other parties in the Senate, blocked the government’s attempts to cut small supplements available to the lowest-income families and the unemployed. Labor went to the last election conceding Newstart was inadequate, but promising only to review the payments.

Turnbull’s ministers are implementing all policies they think will push people into work – such as the cashless welfare card, the new demerit system for jobseekers and the government funded internships – things they say tackle the real problem of family “dysfunction”.

But under the new Tudge definition, unemployment benefits have risen and are adequate – “not a lot of money, but not complete deprivation” – so what so many have seen as a problem has been neatly defined away.

This seems to leave one of the most obviously necessary, but politically difficult ways to tackle the deepest poverty and most entrenched inequality in Australia stuck in the hardest too-hard basket of all.