Australia's present education and training performance is falling well short of what it should be. Credit:Virginia Star But the more prosaic role of education and training is to equip people with the skills that help them earn a living. As economists go, however, the commission's more broad-minded than most: "There is additional value in improving skills formation – from foundational to advanced – because it gives people better job security, income and job satisfaction. "These effects are not well measured in the official statistics, but have major implications for prosperity and quality of life more broadly." Trouble is, the commission finds our present education and training performance – from schools to vocational education and training, to universities – is falling well short of what it should be.

"A good school system ensures that people have the key foundational skills – numeracy, literacy, analytical skills – and the capacity to learn so that they can easily acquire knowledge throughout their lives," the commission says. What shocks me most about our schools' performance is their high failure rate. Evidence the commission doesn't quote is the Mitchell Institute's estimate that 26 per cent of students fail to finish school or a vocational equivalent. It seems so many kids have been getting behind and dropping out for so long that schools and their teachers have come to accept this as part of the natural order, not as a sign something's going badly wrong with teaching. The commission notes that, while the regular testing under the Organisation for Economic Co-operation and Development's PISA program shows Australian school students' academic achievement is still above the OECD average, our average scientific, reading and mathematical ability is falling in absolute terms. We've gone for decades underpaying teachers relative to other graduates, so we shouldn't be surprised our brightest people don't go into teaching.

We have a growing proportion of lower performers and a falling share of high performers. Other evidence shows our rates of participation in year 12 physics and advanced maths fell by about a third between 1992 and 2012. One of the worst inhibitors to gains in learning is "learner [dis]engagement" – being inattentive, noisy or anti-social. About 40 per cent of our students are involved in such unproductive behaviour. The commission fears our youth may now be less capable than earlier cohorts. For example, an Australian 15-year-old in 2015 had a mathematical aptitude equivalent to a 14-year-old in 2000. "Australia's growing group of low performing students will be increasingly exposed to unemployment or low participation in the future world of work," the commission says. Its review of the evidence on school performance concludes we need to focus on improving the quality of the teaching workforce and on methods of teaching that have been proved to be more effective.

We've gone for decades underpaying teachers relative to other graduates, so we shouldn't be surprised our brightest people don't go into teaching. Many teachers are teaching "out of field" – subjects for which they have no qualifications. We've done too little testing of the effectiveness of different ways of teaching, and too little dissemination of the results of what testing we've done. It's obvious our classroom teaching isn't as effective as it needs to be, but we've done little about it. The commission has less to say about the failings of VET – vocational education and training – except that it's a "mess" and still recovering from a "disastrous intervention". This was the utterly misguided attempt to drag TAFE into the 21st century, not by doing the hard yards with the teachers union, but by applying the magic answer of "contestability" – allowing private businesses to sell taxpayer-subsidised training for profit. Many rorted the system and cheated students until the government belatedly woke up.

Turning to universities, their performance is also falling short. In 2014, more than 26 per cent of students had not completed their degree within nine years of starting – a significant loss of time, effort and money for the students, as well as taxpayers. And this is before we see any effect from the leap in uni admissions following Julia Gillard's (misguided) decision to provide government funding for any students the unis choose to enroll. The proportion of recent graduates finding full-time employment is falling, with the under-employment rate among recent graduates rising from 9 per cent in 2008 to more than 20 per cent. But the fact that graduate full-time starting salaries have fallen from 90 per cent of average weekly earnings in 1989 to about 75 per cent in 2015 suggests this has more to do with the weak state of the labour market than with a decline in the quality of degrees. Which ain't to say quality hasn't fallen. More than a quarter of recent graduates in full-time jobs believe their roles are unrelated to their studies, with their degree adding nothing to their employability.