Labour's children's spokeswoman Jacinda Ardern said social and economic inequality was hitting children the hardest.
"The report shows families living below the poverty line are much more likely to postpone going to the doctor, more likely not to pick up their children's prescriptions, and to live in damp, mouldy homes.
"Hardship like this should not be commonplace in New Zealand. These parents want to work. But with unemployment rising to 7.3 per cent in the September quarter of this year, the work simply isn't there."
Every Child Counts manager Deborah Morris-Travers said perhaps the biggest concern was that the health system still had to respond to 36,409 poverty related hospital admissions - with the admission rates for Maori and Pacific children higher than European children.
"With 27 per cent of Maori children and 40 per cent of Pasifika children living in poverty it should be no surprise that these children are disproportionately represented in hospital admissions for poverty-related disease."
She said Government targets, supported by plans and resources, could stem the rise in poverty related diseases.
"We therefore encourage the Government to set targets that address the health inequities for Maori and Pasifika children, improve housing, ensure access to nutritious food, and increase the accessibility of health services."
GP and child health expert Dr Nikki Turner, of Auckland University, said the Children's Social Health Monitor presented a mixed picture.
"On a positive note, the large increases in hospital admissions for socio-economically sensitive medical conditions seen during 2007-2009 have begun to taper off, with around 780 less admissions seen in 2011 than were seen in 2010."
This was likely to be partly due to the 2008 introduction of a pneumococcal vaccine, she said, which could be responsible for reductions in hospitalisations for bacterial pneumonia and ear infections.
But Dr Turner noted that admissions for all potentially poverty-related conditions in 2011 were still more than 4000 greater than in 2007, "with rates for a number of conditions, such as serious skin infections and acute upper respiratory tract infections [such as severe colds or sinus infections] continuing to increase".
And rates of admission remained much higher for Maori and Pacific children than for Europeans.
The head researcher for the report, Dr Elizabeth Craig of Otago University, said another negative finding was that although the number of children dependent on state benefits had decreased slightly, they still totalled 20 per cent.
Overcrowding, poor housing, childhood vaccination and access to primary healthcare all influence rates of "avoidable" hospital admissions.
Dr Craig said New Zealand had made improvements in vaccination rates, access to free after-hours primary care and home insulation to reduce cold and damp living conditions that were linked to higher rates of respiratory illness.
"On the negative side, we still haven't insulated enough houses and we've got significant overcrowding."
Associate Health Minister Tariana Turia said it was unacceptable that despite work to reduce ethnic disparities in health, Maori children were still dying and suffering from diseases at a higher rate than others.
- NZ Herald and APNZ
