The Book Council says it is becoming increasingly alarmed at the literacy rate of New Zealand adults and children.
It said surveys have found that 40 percent of adults cannot read at a day-to-day functioning level.
The council's chief executive, Jo Cribb, said international research has also found literacy in New Zealand primary school aged children decreased significantly in the last five years.
She said reading rates in other OECD countries improved, leaving New Zealand children behind.
Ms Cribb said there needs to be attitude change towards reading and it needs to be seen as a fun pastime.
She said reading and processing text is vital for everyday life and the country is letting children down by not developing that skill.
In December, RNZ reported that New Zealand's literacy score had dropped for the first time in 15 years in an international reading test.
Fifty countries participated in the test which scores 10-year-olds on their reading ability. New Zealand was one of only 12 nations where reading ability had fallen.
The score put New Zealand in 33rd place, well behind the highest ranked nations, the Russian Federation, which had an average score of 581 points, and Singapore on 576 points.
The results showed about 27 percent of New Zealand children did not meet the "intermediate benchmark" for reading compared to an international median figure of 18 percent.