National Party Leader John Key says National will make tackling New Zealand's growing underclass a policy priority this year and in government.

"We are seeing a dangerous drift toward social and economic exclusion," Mr Key warned in his State of the Nation address, 'The Kiwi Way: A Fair Go For All', at the Burnside Rugby Clubrooms in Christchurch today.

"I'm talking about places where rungs on the ladder of opportunity have been broken. I'm talking about streets like McGehan Close in Owairaka, Auckland. In one week last year, two kids in that small street killed themselves and another two made unsuccessful attempts. It is a street terrorised by youth gangs.

"Around the country there are other places like this," he says. "We should not be afraid to drive down certain streets, send ambulance officers into certain houses and take our kids to certain schools.

"I know we can do better. We have to do better. Because, left unchecked, the problems of a growing underclass affect us all.

"These are tough problems. But I have no intention of being a Prime Minister who tackles only the easy and convenient issues."

Mr Key says dealing with the problem of a growing underclass will be a priority for National, both in opposition and in government. It will involve tackling serious and interconnected issues of long-term welfare dependency, crime, illiteracy, substandard parenting skills, social exclusion, malnutrition, drugs and lost hope.

"In all areas of social policy, I am tasking National's spokespeople to come up with policies to address the deep-seated problems in some of our families and communities."

Mr Key says National in government will team up with business and community groups to deliver better services to those in need.

For example, National will challenge the business community to work with it in backing a programme to provide food for kids in need in low-decile schools.

National will also work with schools, sports clubs, business and community groups to provide more funding so children in need can get access to sports.

And, Mr Key says, National will turbo-charge the efforts of private and community groups that are seeking to make a difference. He announced that National MP Paula Bennett will be charged with acting as a link with community groups as Community Programmes Spokeswoman.

"Labour often views non-government providers as its competitors, not its partners. It sees them as unprofessional. It tries to squeeze them into boxes that just don't fit. It smothers them with paperwork and makes them apply to multiple funding pools.

"Well, I want to grow the competition," Mr Key says.

"I want to get alongside the amazing groups that make a difference to our communities. I want to ask them what the government can do to support and extend their efforts."

Mr Key cites programmes and groups such as Project K, Big Buddy, the Family Help Trust, city missions, citizen advice bureaux and the Salvation Army as those that a National government will get in behind.

Meanwhile, he says, a National government will not tolerate violence and antisocial behaviour.

"Under a National government, gangs will not be controlling neighbourhoods so that posties can't even deliver the daily mail."

He also indicates National will insist that healthy people getting assistance from the State have obligations – whether that is looking for work, acquiring new skills for work, or working in their community.

"National will use the welfare system, on behalf of all New Zealanders, to motivate long-term beneficiaries to change their lives for the better. Where we give opportunity we will expect responsibility. In giving a fair go we will expect a fair go in return. That's part of The Kiwi Way."

Mr Key says he's proud of New Zealand, and Kiwis are lucky to call this country home. He believes his time in politics will only be a success if he can look back, knowing he played a part in building on that pride.

"I believe the best years for New Zealand are ahead of us. As a nation, we have everything to look forward to.

"We can be a country that is coming together; not a country that is coming apart."

Click to download fact sheet on the growing underclass

Click here to read the entire speech