"So lets just think about that for one minute... one in five are leaving [school] without even NCEA level one... We know we have to change the way we deliver education to young Maori," Mr Key said.
He said New Zealand could not afford to do nothing.
"There is no hope of those young people getting a job unless we deliver them an education system which guarantees them a job."
He also touched on treaty settlements, noting the Government had completed 12 agreements in principle and four acts of Parliament in 12 months.
The pace had to be kept up so that the country did not always have to look backwards over its shoulder to its past.
Maori Party MP Hone Harawira sat on the tangata whenua side with tribal leaders and Winston Peters.
Mr Harawira also spoke on the marae to the Prime Minister's group which included Maori Party co-leader Pita Sharples, Deputy Prime Minister Bill English, MP Georgina Te Heuheu, as well as the dean of the diplomatic corps, His Excellency Pedro Herera.
While Mr Harawira took time to acknowledge many of the leaders gathered, he also challenged the Government not to raise GST.
"A lot of our people are still starving and raising GST might be good for you and your mates but it is certainly not going to help the people on low incomes," Mr Harawira said.
There was only a small distraction during the powhiri when immigration consultant Tuariki Delamere tried to speak.
Lewis Moeau, a senior adviser in the Prime Minister's office, shooed Mr Delamere away before he was able to speak.
Mr Delamere told the
Herald
yesterday