The country's polytechnics are in for a shake-up.

Jacinda Ardern gave her 'State of the Nation' speech to a business audience this morning, outlining the economic challenges facing New Zealand, and foreshadowing a major restructure of polytechnics and institutes of technology.

The restructure is to be released next week.

It's expected to recommend turning the vocational education sector into a flexible network, which focuses on greater cooperation between institutions to meet the needs of business.

Polytechnics and institutes have cost the Government 100 million dollars in recent bailouts.

Ardern told the business audience the reforms would be far reaching.

She said the system was struggling, and had been left to drift and muddle through.

She questioned why at a time when they're facing critical skill shortages, polytechs and institutes are going broke.

Also today, more evacuations have taken place as the Tasman wildfire continues to rage out of control.

The town of Wakefield has been evacuated, and now more families have been forced from their homes in Nelson City, after a new fire broke out.