How can Socialists say capitalism doesn't work and fails at benefiting the poor...
Because capitalism, in it's present incarnation, is failing the vast majority of the world's populace. Just in South Africa alone, a seemingly stable society that was suddenly and violently shook by a spate of miners' uprisings, the lower classes whom toil in the mines live without such basic amenities (or for that matter, necessities) as electricity and running water. The uprising was the result of their conditions, that and not being paid even a bare minimum for their efforts to effectively mine for foreign and/or domestic mining companies which in turn grow fat off of the resultant profits acquired from the country's abundant mineral resources.
What the mining companies-and the government-did was uncalled for. Miners and their families were victimized by a vicious police force intent on doing what it a was always meant to do: to protect the interests of the ruling, capitalist class. Miners were locked out as companies made counter moves against the strikers and as strikers in turn made their own moves against the mine bosses.
One doesn't have to look far to see how capitalism criminalizes the poor in it's never ending search for profit.
when you have "Australia" who have higher standard of living, High wages, longer life spawn and low taxes
As TIG has said, Australia is a country locked into the global imperialist dynamic. Wages, furthermore, are the scraps given to workers for a job well done.
Marx, from his 1844 manuscripts:
The lowest and the only necessary wage rate is that providing for the subsistence of the worker for the duration of his work and as much more as is necessary for him to support a family and for the race of labourers not to die out. The ordinary wage, according to Smith, is the lowest compatible with common humanity [6], that is, with cattle-like existence.
Wages aren't made high for the workers' benefit. If the economy were to tank right now in Australia wages would drop dramatically as in Greece, Spain, Portugal, etc. Wages are made high or low if, and only if, it benefits the capitalist first and foremost.
compared to lets say a Socialism of Cuba
You clearly lack a firm understanding of Cuba and socialism, for that matter.
Cuba (and Venezuela) have made great strides when it comes to decreasing inequality. Cuba, despite being besieged by the U.S., has effectively made itself relatively self-sufficient despite the trade embargo. This in a country that's only a small blip of the world map and which has managed to keep in place socialist policies to a certain degree despite the collapse of the Soviet Union, it's chief trading partner and ally.
in fact Australia has less poor than any Socialist based states
No statistics, no facts about just why we are to assume that Australia has less poor supposedly then the remnants of what once were considered for the most part socialist states. The only country that has really managed to retain it's socialist character is Cuba, which is remarkable seeing as to how the U.S. has sought to destabilize it for decades and well into the 21st century through a barrage of propaganda and lies, not to mention numerous failed attempts at political assassinations of its top leadership.
The truth of the matter is that 20th century socialism didn't succeed in it's final goal of eradicating capitalism; capitalism was only erased in third world or otherwise "weak-link" states (Cuba, the Soviet Union, China, etc.), and was still very much intact across most of the world throughout the entirety of the 20th centuries. Granted, despite being outgunned and outnumbered globally these states achieved momentous achievements in getting rid of centuries-worth of inequality and dependence on foreign powers (in China or Vietnam's case for example).
Under Mao, China not only got "the bomb" but it also managed to mostly eliminate rural inequality along socialist lines by redistributing land as to benefit the vast majority of the poorer peasantry and by creating local self-governance at the village level which freed the villages from the grip of semi-feudalism and the land lords/owners. All this by the early 1950's and only a few years after the culmination of the 1949 Revolution.
What China or Cuba did was/is so much more impressive then what Australia can ever do under capitalism.