AUSTRALIAN schools are performing well by international standards despite a recent "significant" decline in reading performance, a global agency says.
The Organisation for Economic Co-operation and Development (OECD), in a report published on Thursday, said Australia was among five OECD countries that recorded a significant fall in student performance in reading between 2000 and 2009.
The variation between low and high performing students in Australia was also higher than the OECD average in reading and science.
Despite this, Australian student learning outcomes were "very good" by international standards.
The OECD report praised the federal government's controversial My School website, which compares schools' literacy and numeracy scores with the results of statistically similar institutions and to the national average.
But it warned that it could lead to some "undesired effects" in placing too great a reliance on NAPLAN test results.
For instance, it could lead to a "narrowing effect" on the curriculum to more closely align with NAPLAN tests.
"There is also a danger that schools which perform satisfactorily may become complacent as the spotlight falls on those schools which perform least well comparatively," the OECD report said.
It recommended that direct links be provided on the My School website to school reports, which could shed more light on "the factors which have influenced performance".
Federal School Education Minister Peter Garrett said the report recognised the many steps taken by the Gillard government to improve the quality of school education.
"In particular, the report highlights the establishment of teaching standards, and teacher appraisal, as a major development to help ensure every school has suitably qualified teachers," he said in a statement.
But Mr Garrett acknowledged more work was required to ensure every Australian child had access to a better education.
The minister said the federal government was discussing the final details of its review for a new funding system with state and territory counterparts and the non-government school sector.
Mr Garrett said the plan would be presented at the Council of Australian Governments (COAG) meeting on April 19.
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