The Government is failing the country's poorest children, the Green Party says.
New Zealand has been ranked in league tables in new UNICEF report looking into child wellbeing in rich countries.
It focuses on the "bottom end" of inequality -- the gap between the bottom and the middle -- when it comes to income, education, health and life satisfaction.
The poorest 10 percent of families with children have incomes 46 percent lower than the average. That places New Zealand 17th in a table with 41 EU and OECD countries in terms of income inequality (first being the most equal).
Between 2008 and 2013 income equality remained relatively the same, with a small drop in the relative income gap of 1.1 percent.
In terms of education, New Zealand ranks 31st for inequalities in educational attainment for children -- and is going backwards, with a growing number of students failing to achieve academically.
Green co-leader Metiria Turei says that means the Government has done nothing to fix the problem.
"It's time for New Zealand to deal with the shocking income gap, which means a huge numbers of Kiwi children are forced to have a quality of life that's out of step with a compassionate first world country," she says.
"It is a massive indictment that under this Government kids from poorer families have less of a chance of escaping poverty through education than they did before National came to power."
Social Development Minister Anne Tolley says she was pleased to see New Zealand in the middle band where there hasn't been much change in inequality.
"I think we're doing a lot. We've increased the benefit -- that was all paid out this week. We've got free medical treatment for children up to 13, we've got the breakfast programme -- all of that contributes."
However, she says the data is "old" at around three years old.
New Zealand wasn't ranked on self-reported health and life satisfaction because of a lack of data which could be compared to other OECD countries.
But UNICEF New Zealand national advocacy manager Deborah Morris-Travers says based on what is known from District Health Board data, "some children in New Zealand experience significantly worse health outcomes than others as a result of poverty and poor housing".
"Childhood experiences have a profound effect on children's current lives, but also on their future opportunities and prospects."
She says the report should be a reminder to the Government to make sure every child has the opportunity to "reach their full potential".
Ms Tolley wasn't sure why there wasn't enough data to compare on the other two measures.
"The other two measures, one of them is wellbeing -- how do you measure that? I don't know. I don't know why we didn't contribute, but I know it is very difficult to measure wellbeing."
She says other countries can measure data in different ways, and need to take other factors into account.
Unicef Innocenti Report Card 13
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