Key Points:

About 380,000 Kiwi adults' literacy skills are so poor they would be unable to determine how to use a fire extinguisher from the instructions written on the bottle.

Prime Minister Helen Clark yesterday revealed the finding in the previously unreleased 2006 Adult Literacy and Life Skills Survey as she elaborated on plans to keep teenagers in training for longer.

The Labour-led Government is considering raising the school leaving age to 17 as part of a suite of measures to boost students' achievement and get them ready for the workforce.

Helen Clark said about half the existing workforce did not have the skills needed to fully function in a "knowledge society".

She said about 380,000 Kiwis were identified in the international survey as being at level one, a level at which they would be unable to determine how to use a fire extinguisher from the instructions written on the bottle.

"And of the over three quarters of a million people estimated to be at level two it is said that people at that level can deal with material that is simple, clearly laid out, and where tasks involved are not too complex," said Helen Clark.

"But may not, for example, be able to transfer information printed in a catalogue on to an order form."

The Ministry of Education already cut the number of under 16s getting approval to leave school early. The number of 15-year-olds getting the exemption has rocketed up by 41 per cent since 1999.

It has started to ask schools to consider keeping students on their rolls while the students do training as a way of ensuring they have a fall-back if they don't complete it.

National's education spokeswoman Katherine Rich said Labour had been talking about the plans since 2002 but had achieved very little.

She said a $56.6 million package in the 2003 Budget promised to ensure "all 15 to 19 year olds are involved in education, training or work or other options by 2007" had not delivered.

"Here we are in 2007 and we still have kids on the independent youth benefit and some who are leaving school neither to attend training, work opportunities or some other kind of healthy option," said Ms Rich.

She said the debate must be about making school relevant for students.

"There's been no call to raise the leaving age. Our leaving age is on par with most OECD countries."

Chris Carter, who was made Minister of Education yesterday, said there was an issue with teenagers who were dropping out of school and "falling between the cracks".

He said agencies across health, education and social development were working together to provide options to extend compulsory formal education or training.

"If we were going to do that, we will need to have these alternatives for schools available and skills training and apprenticeship training," said Mr Carter.

"We are really working hard to see some changes take place soon - and I can't quantify it more than that."

The Institutes of Technology and Polytechnics New Zealand executive director Dave Guerin said the sector supported the move but more Government funding would be needed.

- Additional reporting Stuart Dye