Government agencies have been directed to avoid remanding young people in residential centres where possible and work more closely with local communities under a new youth justice plan.
The plan, unveiled on Thursday morning, aims to reduce youth offending by 25% in the next 10 years.
Government agencies, alongside communities, will identify local crime problems and how best to respond to them.
The Ministry of Social Development will look for alternatives to remand in a residential centre, without compromising public safety. That could include electronic monitoring or bail, where families and offenders are given more support to help them comply.
Associate Justice Minister Chester Borrows says the number of young people appearing before the courts is down 19% since 2011, but more needs to be done.
Mr Borrows told Radio New Zealand's Nine to Noon programme there is a key focus on reducing the growing number of Maori offenders. He says the plan includes a $400,000 fund for community-based youth initiatives.
Mr Borrows says to prevent reoffending, a major overhaul is needed of the way existing offenders are dealt with.
But the Labour Party has questioned the need for the Government's new plan. Justice spokesperson Andrew Little says the existing plan it brought in was already working, with youth crime down 19% in the past two years.
Mr Little says the Government should focus on improving access to health services and education for young people.