The University of Auckland study involving 27,333 children aged 5 from Northland and Auckland, found 40.9 per cent of the children had caries, with more than three teeth affected by decay in 20 per cent.
It also found a higher prevalence of decay in Pacific children [64 per cent], Māori [59 per cent], Asian [44 per cent] and those from the most deprived areas [60 per cent].
Reasons for the high rates of dental caries included a lack of fluoridation in community water supplies in some areas, high deprivation in some neighbourhoods, a shortage of dentists and financial resources for dental care, and minimal regulation on the availability and promotion of sugary drinks and food.
Waitakere Hospital Paediatrician Dr Tim Jelleyman, one of the authors, said he wanted the oral health of children admitted to hospital with injuries such as broken bones to be considered.
"One of the things we can do is see if they are enrolled in their oral health service. So for children it's free. Check the families know about that.
"And through all our services, encouraging prevention - water rather than sweet drinks, that sort of thing."
The report said overall more effort was necessary to reduce the burden of dental cavities in Auckland and Northland.
It said a sugar-sweetened beverage tax, regulating the promotion of sugary food and drinks, and health warnings on product labels similar to tobacco products, are necessary to address oral health problems in New Zealand children.
Innovative health promotion including using interactive platforms such as videos, songs and television, alongside tooth-brushing demonstration, could be considered.
High-risk groups could be targeted with interventions such as toothbrush kits and brochures.
Some programmes were already in place including supervised tooth brushing in some schools while at Whangārei Hospital, where mothers, children and siblings are provided with oral health care information directly in wards.
"The association of early childhood caries with childhood injury observed in this study suggests a similar opportunistic provision of oral health care would be worth considering in emergency care settings."
Jelleyman said oral decay was preventable and New Zealand's statistics could be changed through healthy eating, which also targets childhood obesity, and good habits such as regular teeth cleaning with fluoride toothpaste.
"You'd think it would be common sense but actually it's challenging for families to change patterns. It's a long journey and we all need to move together on this."
