The claim that children, or people in general, spend less time reading is true. However, the source cited by the original poster is somewhat misleading and inaccurate to children's time spent reading in particular, as it is a study conducted with adult subjects.
From the National Library of Medicine I found this source that emphasizes the ABC article claim that people in general have spent less and less time reading. More notably, I found an article from the National Literary Trust that focuses primarily on children aged 8 to 18. This article explains the decrease in reading since 2005. The information in this article is interesting and convicing, however it is important to note that it is sponsored by a brand called "twinkl" which dedicated to helping children read. The National Literary trust did a similar research project in 2019 and found similar findings.
Overall the National Literary Trust is a nonprofit (charity) that profits with educators and empowers literacy. Its documentation of the decline in literacy rings true and is supported by this article by the Pew Research Center. Here they also noticed a trend in reading for fun decreasing over the years, this time between children aged 9-13. They break down their processes well and have similar outcomes to the National Literary Trust.