Child protection authorities received more than 207,000 notifications in 2009, a six per cent increase on the previous year.
And about 33,000 were substantiated, a 1.7 per cent increase, the Australian Institute of Health and Welfare report shows.
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The institute says the rise could be attributed to increased community awareness, and reporting rates.
But child protection groups are not convinced, and say the problem is likely to be far worse than the figures suggest.
The National Association for Prevention of Child Abuse and Neglect says there's a lack of reliable data in Australia.
"The statistics only cover what is known by authorities, but we still have no good data on the underlying prevalence of child abuse," a spokesman told AAP.
The Australian Childhood Foundation says authorities are not properly investigating cases, because of the volume of notifications.
"When I look at those figures I think there are many children who are being left unprotected," CEO Dr Joe Tucci told AAP.
"The system is set up to screen cases out rather than protect children."
The number of child protection orders issued also increased by 8.5 per cent to more than 35,000 in 2009, double 2004 levels, the report shows.
A similar number of children were in out-of-home care, mainly living in foster homes or with relatives, an increase of about 10 per cent on the previous year.
Aboriginal children were more than eight times more likely to be on an order or living away from home.
The most common form of abuse was emotional, except in West Australia and the Northern Territory where rates of neglect were higher.
And NSW had the highest number of abused children, more than 14,000, followed by Queensland and Victoria with more than 6,000.
Dr Tucci says NSW is likely to have more cases because children in families that experience domestic violence are counted, unlike other states.
And that's just one example of how disjointed the national system is, he said, adding that the federal government should introduce uniform laws.
"There's a lot more that needs to be done before we can confidently say that a child, no matter where they live, will receive the same level of protection."
