A new report by the Ministry of Justice reveals Māori are eleven times more likely to face prison time once convicted.
The report also found that between 2014 and 2017, Youth Court appearances for Māori increased by 23 percent, while the rate for non-Māori fell by 12 percent.
Associate Justice Minister Aupito William Sio said the penal system was geared against Māori.
"The system by its nature, by its very hardcore nature, over many, many decades, seems to condemn Māori more than any other race in New Zealand."
The system needed to move away from punitive measures and toward rehabilitation, he said.
Offending by young people aged 14-to-16 more than halved, falling by 63 percent since 2010.
Reduction rates are much higher for Pākehā, which fell by 74 percent whereas Māori dropped 59 percent.
The Associate Justice Minister Aupito William Sio said the system needed drastic reform to help young Māori.