The most vulnerable children are being left behind, even as the economy improves.
The Children's Social Health Monitor, published today, shows little progress on helping the tens of thousands of children admitted to hospital for injuries and illnesses linked to poverty.
Admissions for the illnesses linked most closely to poverty and overcrowding have increased, even as the broader economy has grown.
One in five children remains dependent on benefits, which often are not enough to pay for proper clothing or food.
These children - more than 220,000 in New Zealand - are far more likely to skip doctor visits, miss out on healthy food and live in cold, damp homes.
"Some of the adaptations families make in response to their inadequate resources may have detrimental health consequences for their children."
While the report shows improvement in some areas, this is hindered by a growth in illnesses linked to overcrowding.
Overall fewer children were admitted to hospital last year for illness linked to poverty, with a sizeable drop in pneumonia and bronchiolitis. The drop has been attributed to ramped-up immunisation programmes.
However, children's health still remains worse than before the global financial crisis, with 4000 more admissions than in 2007.
There has also been a rise in the number of children admitted for skin infections and rheumatic fever.
Children's Commissioner Dr Russell Wills said these illnesses were linked directly to people living in cold, cramped homes.
Despite some economic improvement, continuing high employment meant more people were moving in with family to save money, leading to overcrowding.
"It's called the grandma's house effect," he said. "Dad loses his job and can't afford the rent, so they move in with grandma. Then when someone brings home a cold, the whole house gets it."
Otago University Child and Youth Epidemiology Service director Elizabeth Craig said where immunisation could be introduced, it had been effective.
But illnesses that could not be immunised against were getting worse, indicating an increase in underlying poverty. Better immunisation needed to be matched with improved housing standards and reductions in overcrowding, she said.
Health Minister Tony Ryall said the Government took child health seriously, with a range of steps taken to reduce poverty and child abuse.
These included expanding free doctor visits for children under 6, and the $24 million rheumatic fever programme.
"Initiatives introduced or extended by this Government . . . are making a difference and improving the health of our children."
Labour's spokeswoman for children Jacinda Ardern said the Government was not doing enough, with actions like the White Paper for Vulnerable Children failing to produce meaningful results.
"Hardship like this should not be commonplace in New Zealand . . . Let's be clear, poverty is making our children sick. Now more than ever the Government needs to focus on reducing poverty rates. Until it does, we will all pay the price."
The report was written by a working party that included representatives from health organisations, universities and Crown entities.
On average about 140 abused or neglected children under 12 are admitted to hospital with injuries every year.
Among children under 5, the most common injury is severe brain trauma, with 101 cases in the past five years.
On average eight children die of assault every year, giving New Zealand one of the worst records for child abuse deaths in the OECD.
More than 36,000 children are admitted to hospital every year for illness linked to poverty.
In the past five years more than 600 children have died from poverty-related illnesses and injuries.
- The Dominion Post