Funding schools according to their decile ranking - the socioeconomic status of pupils - was ''very clumsy'' and too often used as ''an excuse and an explanation'' for everything that happened in schools, Education Minister Hekia Parata said after a conference in Queenstown today.
''I think that is unacceptable,'' she told almost 200 delegates at the Independent Schools of New Zealand (ISNZ) annual conference.
Decile rankings simply ''average everything out''.
''I don't like deciles. I never have.''
The comments came after she was asked about a New Zealand Council for Educational Research report.
The report revealed there was a growing disparity between schools in rich and poor areas.
It found schools in wealthy areas were raking in about $1100 more in funding a year for each student than their lower decile counterparts, while teacher morale had hit its lowest point in almost a decade.
Parata said she was unable to comment on the funding claim, however, she said she would be surprised if that figure was accurate.
The government now invested $6.3 million into schools - a 30 per cent increase since 2008 - and some schools had dropped their requests for donations because they were managing without them, she said.
''I'm interested to understand what's going on there... we need to understand why it's happening.''
Parata had already asked the Education Ministry for a report on how New Zealand schools should be funded across the sector.
Although the intention of the decile system - to recognise different socio-economic challenges - was good, it appeared to have become become outdated.
''Over time any system becomes less useful. We do need to review the way we fund schools and focus more on outcomes rather than blunt proxy,'' she said.
Experts had found that four consecutive years of quality teaching eliminated any trace of socio-economic disadvantage.
In a book released yesterday, NZCER's Dr Cathy Wylie offered insight into the state of schools, highlighting New Zealand's social inequality issues.
She found more than half of principals at high decile secondary schools felt they had to compete with nearby wealthy and private schools for enrolments.
ERO removed decile ratings from schools' reports from last year, but many parents continued to use a high decile as a marker of a "good" school, Wylie said.
A comparison of the total income of five decile one and five decile 10 primary schools is highlighted in Dr Wylie's research in Inequality: A New Zealand Crisis.
A study found that the decile 10 schools had about $1100 more per pupil to spend each year than the decile one schools - despite lower decile schools receiving larger sums of government money.
The decile one schools' average spending money totalled $7500 per student while the decile 10 schools' amounted to about $8600.
A United States study suggested that students from poor homes needed 40 per cent to 100 per cent more funding for each student to provide equitable learning opportunities, Wylie said.
But it wasn't just low decile schools scratching to make ends meet. While schools in wealthy areas were more likely than their low decile counterparts to be able to tap into funding through donations from parents, fundraising, and attracting international fee-paying students - almost a quarter reported voluntary fees and donations from parents dropped in 2012.
Seven Manawatu mid to high decile state schools have begun using charitable foundations to collect money beyond school fees, including its biggest school, Palmerston North Boys' High, and Feilding High School.
Boys' High rector David Bovey said despite the school's decile nine rating, which classed it as wealthy, it struggled every year to get voluntary fees and donations from parents and had to look to alumni for support.
"We have always been a little bit dubious about our decile rating and I don't think it's an accurate reflection of our zone or roll. We have a number of families who can't afford to pay our fees, it's simply out of their reach."
The report also found that NCEA remains an issue after a decade since it was first rolled out with teacher morale dropping to its lowest point since the assessment system was introduced.