The Greens want to see schools in lower income areas turned into hubs which would meet all the health, social and welfare needs of poor families, with Labour throwing its support behind the proposal.

Green Party co-leader Metiria Turei announced the policy in her state of the nation speech in Wellington today, saying educational achievement was worsening with increasing inequality in New Zealand and the best way for people to escape the poverty trap was through education.

"Education remains the most effective route out of poverty. But school only works for children if they are in a position to be able to learn," the party's policy statement reads.

"Many kids come with a complicated mix of social, health and family issues, often related to low income, that need to be addressed before they can get the most out of school."

The Greens want to cluster a range of social services in schools to be able to meet the social, education and health needs of children and their families on one site.

Under the proposal, children in schools with decile ratings of 1 to 4 would be fed by the state through a national lunch fund and be able to get medical attention from dedicated school nurses. There would also be support services provided to their families to help them find work, further their own education and get more involved in their kids learning.

The party would employ a coordinator to run the hubs rather than placing the burden on teachers, offer free after school and holiday care and build up to 20 early childhood centres onsite at some low decile schools.

The policy would cost about $100 million a year.

"It is heartless to expect kids results to improve without fixing the driver of most educational inequity, poverty," Turei said today. There were examples of hubs in schools in New Zealand which were raising achievement levels and drawing communities together.

The announcement comes after the Government revealed a major education policy last week which would see an extra $359m spent on specialist teachers to improve education standards in poorly performing schools.

The policy would see top teachers and administrators sharing their expertise in under-performing schools to improve the results of students in those schools.

Turei said the National policy did not address the underlying issues driving poor achievement among children from lower income families.

"The best teachers in the world, no matter what they're paid, can't teach a sick or hungry kid, we have to deal with those issues first."

Turei also said they did not yet know how the Fonterra and Sanitarium-sponsored Kick-Start breakfast programme in schools, which the Government last year allocated $9.5m in funding over five years, would fit with its own lunch in schools policy.

"I'm yet to see how they would fit into the scheme... they do a good job but corporate welfare, or corporate largesse if you like, is not the solution to serious poverty and inequity it is the responsibility of the state."

The programme could be expanded to more schools but would concentrate on areas of highest need first, she said.

Labour's Education spokesperson Chris Hipkins supported the policy saying many schools already provided extra services but did not receive enough support, something Labour also wanted to address.

"The lives that children live outside the school gate have a big impact on their readiness to learn and their achievement in school. Unlike John Key and the National Party, we're not willing to turn a blind eye to that."

Hipkins said there would be negotiations with the Greens about priority areas and timing but the announcements "provide a clear marker of the types of initiatives we can work closely together on".

New Zealand Educational Institute president Judith Nowotarski said the proposal to develop the hubs "goes right to the heart of tackling the biggest problem we face in our education system - poverty and inequity".

"International evidence clearly shows that poverty and inequality are by far the biggest obstacles that children face in education.

"This proposal directly targets these real issues and, if adopted, would make a big difference to the education outcome of thousands of children in this country."

But inequality and poverty are now much more spread and the policy should target children from financially disadvantaged backgrounds at all schools - not just lower decile schools.