Schools will have to prove they are helping struggling students after it was found that as many as one in five pupils in the system is failing.
The large disparity between New Zealand's best students and those falling behind has prompted the Education Review Office to include the new evaluation in all its school reviews by next June.
Schools will be expected to make special efforts with literacy, numeracy and cultural awareness.
The ERO - which reviews and publicly reports on all schools and early childhood education services - says although evidence shows New Zealand's top students are on a level with the best in the world, there is a large group at the bottom who are not succeeding.
In its annual report, released yesterday, acting chief review officer Mike Hollings said that group could be as large as 20 per cent of students.
With 765,000 pupils at school, this means some 153,000 students could be affected.
Onehunga High School principal Chris Saunders said the figure did not surprise him. It was a trend he had noticed over a number of years and one his school worked to correct.
He believed there was a connection between students not succeeding in the system and social problems such as the youth gang clashes.
"It has to be part of it. If a student reaches secondary school and is still way behind the eight ball in terms of literacy and numeracy skills, they are going to struggle, they are going to be on the back foot and it can manifest itself in anti-social behaviour."
Education Minister Steve Maharey said students' underachievement was one of New Zealand's core issues.
Mr Maharey, who took over the education portfolio last week, said his predecessor, Trevor Mallard, had been well aware of the issue.
Work had been done to intervene to improve literacy and numeracy skills.
Mr Maharey said other policy initiatives would be introduced such as looking at high-performing schools and seeing how their success could be translated to other schools.
The problem was spread across most schools rather than grouped in a particular area, but of particular concern was the under-achievement of Maori and Pacific Island students, which was why there had been a focus on lifting their achievement.
Mr Hollings also identified a cultural element in the under-achieving. Helping these students was likely to be more successful where there was a cultural understanding between them and their teacher. "We know that parents, whanau and the community are least likely to be involved in the education of this group."
Secondary Principals Association president Graham Young said Maori and Pacific Island students were disproportionately represented among the under-achievers.
"Unless we address it now, in a couple of generations it will be a frightful problem for this country."
Mr Hollings said the area where New Zealand was least effective was identifying struggling students and more work was needed to find out their needs. "Getting the system to work well for every child is a significant educational challenge with social and economic consequences, but it is not beyond us."
Aorere College principal Mike Williams said it was well established that New Zealand's top students outperformed those of most other countries but the concern here was the large tail of poor performers.
Mr Williams said variations between schools were quite small, but within schools were major.
Under-performance had been a long-term problem, he said.
Keith Gayford, former president of the Mangere Principals Association, put the blame on high schools that offered outdated curriculum.
Mr Gayford, a primary school principal, said once students hit high school the truancy rate tripled.
"Many of their programmes seem to be based on the needs of kids 20 years ago. I think you'll find it is the performance of schools not students that is the problem."
- additional reporting Angela Gregory
Help strugglers, schools are told
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