Forgotten in life, a victim shames a city: The violent murder of a homeless man triggers Melbourne's remorse

Passers-by take 'selfies' at the scene where Wayne 'Mousey' Perry was stabbed to death

Wayne "Mousey" Perry lived and died in Enterprize Park, just across the Yarra River from Melbourne's Crown Casino and pricey waterside restaurants. While his life aroused scant interest, his death has exposed an underside of the world's "most liveable" city, famed for its devotion to sport and an annual comedy festival.

Wayne Perry, 42, was sleeping rough in the park, named after the ship which brought the first white settlers to Melbourne in 1835, where last weekend he was stabbed to death. His murder made headlines all week, forcing Melburnians to confront the wretched lives of the city's homeless – its "forgotten people", as the Salvation Army's Major Brendan Nottle calls them.

The killing horrified a city named the world's most liveable for the past three years by The Economist Intelligence Unit. But horror turned to disgust when passers-by began taking "selfies" at the scene, with a pool of blood and Mr Perry's meagre possessions – including a broken pair of spectacles – in the background.

On Friday, Major Nottle held a funeral service for a man he first met in 1987, when Mr Perry was a 15-year-old with a shaved head and a swagger, already living on the streets. Easton Woodhead, 19, has been charged with the murder.

A talented artist and rower, Woodhead attended Melbourne Grammar, a prestigious private school whose alumni include the comedian Barry Humphries, creator of Dame Edna Everage. Woodhead's background is very different from that of his alleged victim, whose mother abandoned him when he was 14.

Yet Mr Perry was "generous and caring", according to Major Nottle, even if he "occasionally did things that were out of line in order to survive". He would help others who slept rough, inviting them to share his spot under a railway bridge".

He added: "Mousey had built some really strong connections with housing workers and we were doing everything we could to encourage him off the streets, but unfortunately that didn't transpire before his death. So we've lost him."

Mr Perry told outreach workers at a Salvation Army hostel that he wanted to tackle his drug problems before leaving the streets.

According to a survey last year, more than three-quarters of Melbourne's homeless have suffered physical violence. One agency working in the field, Youth Projects, said street people are regularly assaulted by gangs of drunken men who throw their belongings in the river.

Major Nottle cites a "really disturbing juxtaposition" of the homelessness camps with "these incredible symbols of power and influence and wealth" in the city. At Enterprize Park, he said, "you've got trains going overhead and people driving past, going in and out of expensive restaurants, right next to where some of the city's most vulnerable people are sleeping … yet they are largely invisible".

At Mr Perry's funeral, he said: "There was a lot of grieving in the chapel, but it actually felt like Melbourne was grieving, because it touched the city's conscience."

Mr Woodhead's lawyers are concerned about his mental health, they told Melbourne Magistrates' Court last week.

Mr Perry was a father of three – and, unknown to him, a grandfather. Among the hundreds of mourners at his funeral were relatives who had searched fruitlessly for him, and neighbours from Enterprize Park.

Mr Perry was also a statistic – one of nearly 30,000 homeless who sought assistance in Melbourne during the 2012-13 financial year. Nearly 7,000 of those were turned away because of a shortage of staff or accommodation, caused by cuts.

According to homelessness agencies, support services are under-resourced. Three days before he died, Mr Perry was interviewed by The Age for an article about homelessness – he told the reporter "you have to sleep with one eye open because you don't know who's going to bash you or stab you or rob you".