The number of children living in poverty is heading in the right direction for the first time - but New Zealand isn't in the clear just yet.
The latest Child Poverty Monitor shows 12 percent of children are living in material hardship, down from 14 percent in the previous report.
Children's Commissioner Andrew Becroft says it follows an increase in benefit levels in 2015.
"But it'll take more than those sorts of one-offs to really beat the problem."
"It's going to need sustained and continuous and strategic efforts over the years to come. And that's what we need to see now and that's the challenge."
Mr Becroft says there are still 290,000 children in households on low incomes and up to 135,000 children lacking basic items.
"It is essential that we keep up this momentum. One small step will not be enough.
"We need to see changes like these every year to see a substantial long-term decrease in poverty, and ensure these gains are not cancelled out by increases in the cost of living.
"We can see for the first time some real progress towards wiping out child poverty, but it will take many small steps to get there."
KidsCan chief executive Julie Chapman told The AM Show the job "certainly isn't done".
"There are many children out there that don't have a bed to sleep in. There are families that are sharing one toothbrush between the entire family.
"There are families that can't afford basic things like shampoo, deodorant, sanitary items. I think the key to this is to continue to raise incomes."
But Ms Chapman says it's a step in the right direction.
Prime Minister Jacinda Ardern - who is also the Child Poverty Minister - says she's committed to making significant progress.
"Every child deserves the best start in life and to grow up and reach their potential free of the burden of poverty.
"While it is encouraging to see the gains reported in the Child Poverty Monitor today, there are still thousands of New Zealand children going without the basics they need."
She says she "prepared to be held to account" for all changes.
The Government will announce details of its Poverty Reduction Bill next week.