Australia was now ranked as the ninth worst performer in the income inequality ratings of 34 developed nations, behind New Zealand, Denmark, Hungary, France, Poland, Spain and Canada.
Thornton attacked policies that cut assistance to force the poor to find work.
"It is time that we left behind the outmoded notion that we can actually address poverty by making life harder for people or that we can help people find jobs by kicking them when they are down."
Foodbank Australia chief executive John Webster added: "One in 10 people suffer food insecurity and yet as a country we are a net exporter of food. The food we waste would alone be enough to bridge the gap and ensure that every Australian stomach is full."
Foodbank, which collects surplus food from manufacturers and retailers and distributes it to welfare agencies, says 80 per cent of the agencies cannot meet demand for food, 65 per cent of people who do receive it do not get all they need, and that one in three seeking food are children.
Foodbank chairman Enzo Allara said times were becoming more precarious: "For many Australians, it only takes one unexpected cost or event to tip the balance."
The organisation provides food for 88,000 meals a day and still cannot meet demand.
In the past four years it has almost doubled deliveries of food and groceries to welfare agencies and arranged for the manufacture of more than 10m kg of key staple foods.
"Yet we are still not solving the problem," Webster said. "There are still too many people who are going without."
St Vincent de Paul Society chief executive John Falzon said agencies were continuing to see the emergence of two Australias - one characterised by prosperity and high-end consumption, the other by a daily struggle to be able to afford the necessities of life.
"Income support is not enough," he said. "We need to look at what locks people out of the labour market.
"Tackling inequality means investing in high-quality social and economic infrastructure for the benefit of all. It means high-quality education and health being completely accessible to everyone regardless of their income or their postcode, their gender, the colour of their skin, or their disability.
"It means guaranteeing appropriate housing rather than abandoning people to a private rental market that is notoriously bad at meeting the needs of low-income households."
The health of many is suffering. Consumers Health Forum chief executive Carol Bennett said too many Australians were having to decide whether to pay food and power bills, or pay for the healthcare they needed.
"We are seeing the emergence of a two-tiered health system where people on low incomes struggle and often fail to get the care they need in a health system which can provide the very best care for those who can afford it," she said.
Disadvantaged patients typically waited 44 per cent longer for surgery than the well-off, and out-of-pocket medical bills forced disadvantaged households to think twice about getting a prescription medicine or seeing a specialist recommended by their GP.
Life is also hard for many in rural and remote Australia. A joint report by the National Rural Health Alliance and the Australian Council of Social Service said that people living in poverty in the bush lacked adequate health and dental care, good education, employment opportunities, affordable quality food and recreation.
Compared with major cities, a higher proportion of rural people rated their health as only fair or poor, more had a profound or severe disability, and more died from preventable causes.
