Lack of literacy skills failing school students, report finds

The Grattan Institute Reading Guarantee report has identified a failure to teach Australian children to read properly and it's costing the economy billions of dollars.

It found in a typical Australian classroom of 24 students, eight can't read well.

Report lead author and education program director Hunter Jordana is calling for an "education revolution" on what is a "preventable tragedy".

"The reason most of those students can't read well enough is that we aren't teaching them well enough," she said.

"Australia is failing these children."

"Every child we fail to teach to read misses out on a core life skill, and Australia misses out on their potential too," she said.

A public policy think tank wants governments to commit to a six-step "reading guarantee" or risk leaving children behind.

Students who struggle to read were more likely to end up in poorly paid jobs or unemployed, the think tank said in a report.

Not only do students miss out on potential earnings, but governments also forgo tax revenue and spend more on welfare, public health and justice.

The cost of sub-par reading performance to Australia is roughly $40 billion over the lifetimes of those most acutely impacted, based on the institute's calculations.

In its report, the think tank called for state and territory governments and Catholic and independent schools to pledge to make at least 90 per cent of students proficient readers.

It also wants universal screening of reading skills to catch students falling between the cracks, and guidelines for teachers based on the "structured literacy" approach that includes a focus on phonics in the early years.

The institute said the "evidence is now clear" on the best way to teach children to read - starting with learning to sound out the letters of each word - and outdated approaches should be banished.

Federal Education Minster Jason Clare agreed and said the "reading wars" were over.

"We know what works," he said.

He said the existing National School Reform Agreement, a Commonwealth, state and territory commitment to boost student outcomes, would not "move the needle".

"The new agreement we strike this year needs to properly fund schools and tie that funding to the sort of things that work," Mr Clare said.