The secondary teachers' union is calling on government to abolish achievement targets and ban international qualifications such as the Cambridge exams from our high schools.
A paper released today by the Post-Primary Teachers Association said the government's 85 percent NCEA Level 2 target was encouraging "credit farming" and when combined with other factors, undermining the qualification.
The union said it would only continue to support NCEA if changes were made to ensure it retained its quality and fairness.
These included the removal of the government target, less required moderation, a reduction in the dominance of universities over the qualification, and a ban on international qualifications such as Cambridge and International Baccalaureate.
President Angela Roberts said until now, the union had supported NCEA but "incremental impositions" had eroded the way in which it was used.
"We are looking back and thinking why did we buy into this again? Was it worth the blood sweat and tears? What happened to the innovation?" she said.
Education minister Hekia Parata said she made "no apologies for setting out to lift achievement rates by setting a challenging target".
She said between 2011 and 2014 the percentage of 18-year-olds with NCEA Level 2, or an equivalent qualification, rose by almost 7 percentage points to just over 81 per cent.
"That means thousands more of our students are leaving school every year equipped with the skills they need to undertake further education or training."
The minister said while NCEA was robust and credible, the government believed in choice, so if some parents wished their children to sit other exams it would not stop them from doing so.
The paper, written for the union's conference and to be voted on by members next week, found that the target had encouraged schools to offer courses that delivered high numbers of credits, regardless of whether the courses were quality or relevant to students' learning.
"Students themselves seek out courses which are perceived to deliver the most credits for the least effort, but these may not be the courses that will most benefit them in the medium and long term," it said.
It said schools offering Cambridge and IB made public assertions that portrayed the NCEA as not challenging or lacking credibility - which was not true - and therefore should be banned as it was further undermining the local qualification.
Ms Roberts said the qualification had become a "servant to too many masters" and was now about passing, not pathways to future education or employment.
"So many things are now having an effect on the qualification that has nothing to do with the students," she said.
Labour education spokesman Chris Hipkins said the government needed to urgently reassess the way it set its NCEA targets in light of the report.
"Rather than obsess about statistics, the Government should be focussed on ensuring every school student is engaged in meaningful learning that will lead them to more opportunities," he said.
"Kids are completing NCEA Level 2 qualifications and still finding themselves unemployed at the end of it."
Mr Hipkins said there was no point having an 85 per cent pass rate if the means to achieve it were undermining the entire qualification.