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Australia's future will depend on how well it develops the ‘human capital’ of its population.

A well-performing schooling system is fundamental. It benefits individuals, the functioning and cohesion of society and the performance of the economy.
The importance of school education has increased with the shift to a more knowledge-based economy. Australia’s schooling system generally delivers good, though not outstanding, outcomes at reasonable cost. The foundation skills of the ‘average’ Australian student are at the upper end of international rankings, while total expenditure on school education, as a percentage of gross domestic product, is marginally below the OECD average. However, other aspects of school performance point to a need for improvement.
Despite an increase in spending per student and falling class sizes, there is evidence that student literacy and numeracy have declined in recent years, and that Australia has fallen behind other high-performing countries.  
Australia does not perform as well as comparable countries in giving students equal opportunity to realise their educational potential, irrespective of their background or ability.The resulting educational disadvantage is particularly evident among Australian students who are Indigenous, from low socioeconomic backgrounds, have a disability or other special needs, or reside in a rural or remote area. To raise student outcomes, there will need to be an improvement in the effectiveness and efficiency of teachers and other school workers. 
A more effective schools workforce would achieve better student outcomes, and a more efficient one would achieve a greater improvement from any given level of resources. In this report, the Productivity Commission proposes a package of reforms that gives priority to improving teacher quality, reducing teacher shortages, ameliorating educational disadvantage, and strengthening the use of evaluation and research in policy making.
 Many of the recommended reforms would raise the attractiveness of teaching as a profession, and so help to turn around the widely held perception that the status of teachers has declined.

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