UPDATED 9.55am: The Salvation Army's criticising the Government's approach to the Auckland housing crisis, in its latest state of the nation report.

The organisation is still considering whether to get involved if the state sells off state housing, with Major Campbell Roberts saying such a move poses major challenges.

He told Newstalk ZB's Mike Hosking whether the Sallies end up playing a part, will largely depend on what price they can obtain the houses for.

"We keep talking about the market value of those sorts of houses, but they're not houses you can sell on the market in any way.

"They're only worth as much as it's going to take you to run them and operate them properly."

Roberts says there are major challenges for his organisation to consider as the current state housing system needs to operate a lot better than it is now.

Housing at core of issues

The Salvation Army says New Zealand has taken its eye off the ball when it comes to vulnerable children.

It's released its annual State of the Nation report, which says better efforts are needed to tackle serious crime, educational achievement and child poverty.

The Prime Minister says child poverty is a priority for his Government this term.

Report author Alan Johnson thinks John Key is attempting to narrow the issue, to those he calls in "material poverty".

"But if Mr Key is - and his government are - talking about addressing material poverty, which we think would be quite useful, then you really do get back to the question of housing."

The Government's acknowledging violence remains a major problem in our homes.

Social Development Minister Anne Tolley says it's an area she - and others in government - have focused on.

"I know the police are doing a lot of work and the police minister can update you on that.

"But I think we can all agree that it's too high in New Zealand."

Tolley concedes there's no easy solution.

"We've had a campaign running to try and change community attitudes. I think we're getting more reported, but that isn't stopping it necessarily."

Meanwhile, the Government's social housing plans are being labelled a "distraction" by the Salvation Army.

Rising migration is causing major problems around supply and affordability.

Johnson is frustrated, saying we've spent at least two years debating how state housing will be owned, and all the while, nothing has been built.

"The population is growing and housing needs are changing, particularly for older people, and we're not seeing any response to that.

"We're simply worried about whether it's owned by a state, or by a church or by a community group, and that's a distraction."

He adds there's been little progress with social housing since the introduction of Special Housing Units and the Housing Accords.

He says regulation is clearly not the answer.

"Sure it's going to take time, but it's not promising.

"We're not seeing progress anywhere near as much as we'd expect. In fact we're seeing sometimes that things don't happen at all."

Johnson says his wish list for the Government is simple - revisit accommodation subsidies, sort out regulatory reform and set targets for the number of social houses it will build.

"I think the government needs to commit some money to the problem instead of simply just trying to rearrange the deck chairs and set targets with that, and say 'we're going to build 500 or 1000 social housing units in the next year'."