Just 292 children were adopted into stable, loving homes in the past year.

That’s the lowest number on record, and a 74 per cent drop on the number of adopted 25 years ago.

The amount of time it takes to finalise an adoption has also increased to over five years on average for intercountry adoptions.

Adoption advocates say the system is in desperate need of reform.

“Given the number of children who are in need of a permanent loving family, the findings are not good enough and we must continue to advocate for ethical adoption reform in Australia,” Jane Hunt, the chief executive of Adopt Change said.

While adoptions have increased in New South Wales, Queensland and South Australia, they are down in other states, says a report by the Australian Institute of Health and Welfare found.

The report says the number of carer adoptions has increased, despite the overall drop. So more children in long-term foster care are being adopted and given permanence.

However, Hunt says the report doesn’t look at the large number of children that are still in the foster system, waiting for a permanent home.

In news that might surprise people, only 56 “local adoptions” were finalised in the 2014-15 financial year.

A local adoption is the adoption of a child to an unknown family. Nearly three quarters of those children were adopted into a family with no other children.

It’s children in care, either with family or foster carers that make up the bulk of the overall figure of 292 adoptions.

This is good news, as it shows changes to the system to encourage more adoptions by carers are working.

“The majority (61 per cent) of known child adoptions finalised in 2014–15 were by a carer, such as a foster parent, with the majority of these (87 of the 94) occurring in New South Wales,” the report says.

“This reflects that state’s policies, which increasingly promote adoption to achieve stability for children under the long-term care of state child protective services.”

Hunt said the New South Wales results were encouraging, but more needed to be done to get children in foster care into stable homes, particularly those over five-years-old.

“We must recognise that virtually all children who were the subject of a finalised local adoption in 2014-15 were aged under five, with almost half being aged one to four,” Hunt said.

“This would indicate that we have some way to go with children above the age of five in ensuring that they are also the recipients of a more permanent, loving family environment.”

Federal social services minister Christian Porter told the ABC that New South Wales had recently introduced what appears to be the best system for adopting children in care.

“There’s no doubt in my observation that the New South Wales legislative reforms represent the best practice that presently exists in Australia. Certainly they could be duplicated across the Federation,” he said.

Over 43,000 children are currently in foster care around Australia. But the report says there’s no way to know exactly how many of those children are waiting to be adopted, or how many Australians are waiting to adopt.

While records are kept of new applications by prospective parents for overseas adoption each year, those figures only count people who are registered in that year, so if the wait is over 12 months, they are not included in the data.

There are no records of this kind for Australian prospective parents looking to adopt within Australia, or carers wanting to adopt children already in their care.

What’s more, the government does not even keep track of how many children need to be adopted.

“There is currently no way of determining the current population of children in need of adoption,” the report says.

“Information on both populations would help to inform the national picture of adoption in Australia, by providing insights into the present level of unmet need.”

“The lack of current, publicly available data is disappointing,” Hunt said.

“Without the figures it is difficult to assess the real situation and it certainly doesn’t encourage reform where it is clearly needed.”

Christian Porter said the government would continue to push for further reform of the system, to boost adoption numbers across the board.