The Minister for Whānau Ora says its service delivery approach would need buy-in from other government agencies before it could be extended.
The Productivity Commission's latest report into social services recommends setting up a targeted system to deal with those who have the most complex needs.
It found that Whānau Ora had potential to improve Māori wellbeing, and had the characteristics needed for an effective service delivery model.
Minister for Whānau Ora Te Ururoa Flavell said the report was a good endorsement.
"The report certainly talked up the ability of the Whānau Ora approach to deal with some of the issues people have raised with social services.
"They talked about the ability of Whānau Ora to get to those hard-to-reach families, and the ineffectiveness of the state to do that in the past. "
The commission is urging the government to consider the potential of a standalone agency that oversees a client's case across a number of agencies.
Mr Flavell said buy-in from other agencies, such as education, health and social development, was essential for the approach to succeed.
"There's an expectation that Whanau Ora will deliver everything for every Māori, and it's just not possible.
"We need to have buy-in from other agencies which, number one, have the ability by way of resource and, secondly, that many of the issues that people face sit in another sector, not Whānau Ora. Whānau Ora is a way of dealing with those issues."
Mr Flavell said one example of how to devolve decision-making to Māori could be seen in its commissioning agency model.
Te Pūtahitanga o Te Waipounamu chair Norm Dewes said he was pleased with the finding that government should give Māori opportunities to exercise mana whakahaere (authority).
"This is exactly the type of message that we hope government will hear - that a broad investment approach opens up new possibilities."
"We reiterate the statement made in our submission and included by the Productivity Commission in their report that we are disappointed that, across government agencies, other than Te Puni Kōkiri, it would not yet appear that the transformational potential of Whānau Ora is being supported in cross-sectoral investment".
The report describes the role that Te Pūtahitanga plays in the Whānau Ora sector, in terms of being owned and driven by the nine iwi of Te Waipounamu.
The report notes: "This arrangement gives iwi a strong ability to hold the commissioning agency to account, and to link with Te Puni Kōkiri and Ministers through the Whānau Ora Partnership Group. At the same time, it allows each iwi to maintain its distinctiveness and adopt an approach that aligns with its values and aspirations."
Mr Dewes said this recognition was important for whānau in the South.