The Federation of Islamic Associations (FIANZ) says the government must reconsider deprioritising and defunding much of the country's national security framework.
A recent Security Intelligence Service threat assessment says a "terrorist attack on New Zealand soil remains a realistic possibility" and would most likely come from a "self-radicalised" person who acts alone.
FIANZ chairperson Abdur Razzaq said the value of the report was dependent on the proper funding of resources to monitor and respond to potential threats.
Cost-cutting was breaking down the security scaffolding designed to prevent a repeat of the Christchurch mosque shootings, he said.
The government had curtailed the country's ability to research, monitor and respond to potential threats, he said.
"So we are requesting the government to actually look at their budget and give this a high priority because reports like this are barometers of how unsafe we are - and we are."
Last month, the government announced that it would not progress the final eight recommendations of the Royal Commission into the terrorist attack on two Christchurch mosques when 51 people were killed in the shootings on 15 March, 2019.
Razzaq said the government had ignored a Royal Commission recommendation to establish a dedicated agency to co-ordinate anti-terror initiatives.
"After March 15th no agencies said that they were responsible because nobody was looking and because they weren't looking, they didn't find anything.
"What the Royal Commission recommended there should be a single agency which would coordinate and have a strategic direction in terms of our national security and that's gone."
Razzaq said cuts to Department of Internal Affairs, police and locally-led initiatives and research were undermining the lessons from the 2019 attack on two Christchurch mosques.