Associate Minister of Justice Aupito William Sio says while the overall drop in youth offences was positive, the rates of Māori and Pasifika youth committing crime is out of proportion.
While fewer young people are committing crimes overall, youth offending rates for Māori and Pasifika have not been dropping at the same rate.
The first Youth Justice Indicators Summary Report shows Māori and Pasifika youth increasingly make up the greatest proportion of young people who appear in Youth Court.
The rate of offending for children (aged 10-13 years) has fallen by 59 per cent, and offending by young people (aged 14-16 years) has dropped by 63 per cent, between 2010 and 2017.
National Party justice spokesman Mark Mitchell says the overall crime rate reduction showed National's approach was working.
During that time, the rate of offending by Pākehā youth has decreased by 74 per cent, but has decreased 61 per cent for Pasifika, and 59 per cent for Māori.
And between 2015 and 2017, the Youth Court appearance rate for Māori increased by 23 per cent, while the rate for non-Māori reduced by 12 per cent.
While both minor and serious crimes, committed by youth, have dropped, minor crimes have dropped more, meaning serious crime takes up a larger proportion of all youth offending.
Associate Minister of Justice Aupito William Sio said the report showed there were areas in the youth justice system where the Government should be working to further reduce offending.
"That is why it is a key objective of this government to reframe the justice system from a punitive to a rehabilitation focus and reduce the number of Māori and Pasifika youth in the system."
The report showed there had also been a significant reduction in the number of young people (aged 14-16 years) whose offending was serious enough to lead to a Family Group Conference, or court action.
The number of people committing this level of offence has decreased from 4860 to 2026 (a 58 per cent decrease).
There was a substantial decrease in the number of young people in the Youth Court between 2011 and 2017, however, the number of young people who were remanded in custody changed very little since 2011, meaning the custodial remand rate has increased.
"The report shows that the youth justice system is generally performing well, but more needs to be done and I will be working with my Ministerial colleagues to continue to reduce these numbers," Sio said.
National Party justice spokesman Mark Mitchell said the reduction showed the former government was "on the right track", and the coalition Government's "softer policies will risk undoing the good work".
Initiatives like the Youth Crime Action Plan, National's social investment approach, and the roll out of the Rangatahi Courts had a real impact, Mitchell said.
Early results show young people who attended Rangatahi Courts committed 14 per cent fewer offences, and were 11 per cent less likely to commit a new serious offence in the following year than others who had not used those pilot courts.
"National's plan was working, so it's concerning to hear statements from the Ardern-Peters Government indicating that it wants to go soft on crime...
"The challenge for the new Government will be to not only tackle offending by this very serious group of young criminals, but to ensure that the overall youth offending rate continues to trend down."
The report will be published every six months to help inform public discussion about crime, victimisation and reducing the prison population.