Around 148,000 New Zealand children are living in material hardship, according to a new report.
It's defined as living in households unable to afford six or more essentials for a decent standard of living, like food and clothing.
Children's Commissioner Judge Andrew Becroft is calling for a series of "big, bold" and permanent decisions to change that, such as raising benefit levels.
"There's a huge erosion in relativity between wages and benefits. We simply have fallen asleep at the wheel," Judge Becroft told TVNZ1's Breakfast.
"We should all get behind this and we can do it in New Zealand. And we're better than how we've been."
The latest Child Poverty Monitor report was released this morning, an annual study between the Children's Commissioner and the University of Otago.
It found families are struggling to keep up with increasing costs of living, like rent and food.
Judge Becroft says while there have been a lot of positive changes in recent years, more needs to be done.
"In a sense, we have never been better positioned to make these changes. It's going to need courage now and a commitment year by year."
Around 65,000 children live in severe material hardship, going with nine or more essentials.
As well as an increase in benefits, Judge Becroft says there needs to be significant and immediate investment in state housing.
More than 30 per cent of the lowest income households are spending more than half of their funds on housing.
"It's [about] the girl I met in Porirua… saying she lives in a two-bedroom home with 12 people," Mr Becroft says.
"We've got the money to prioritise children and to lift incomes. These big, bold decisions have got to be made and they've got to be made permanently."
He praised current moves by the Government to address child poverty, including a cross-party bill, but says current efforts are just a "band-aid".
"It's short term and won't get to the heart of the problem."
In May, the Government set an official target to slash child poverty down to 70,000 children.