A new international study shows Australian students compare well to those overseas, but the nation is slipping when it comes to literacy.

The Organisation for Economic Co-operation and Development (oeCD) Program for International Student Assessments also found significant inequalities persist between Australian schools.

Geoff Masters, chief executive of the Australian Council for Educational Research, which conducted the national part of the study, says literacy is still the strongest area for Australian students.

"Fifteen-year-olds performed well above the oeCD average in reading literacy, mathematical literacy, and scientific literacy," he said.

"Only six countries significantly outperformed Australia in reading, 12 in mathematics, and six in science."

But despite scoring well in literacy, Australia has still slipped in the ratings.

"Australia is one of only five oeCD countries in which reading literacy levels have declined," he said.

"There are 10 countries in which reading has improved over that period, but Australia is really the only high-performing country to see a decline in reading levels over that time.

"The study itself doesn't provide any insights into why that might be the case, except that it's clear that over that period there's been a decline in the percentage of students performing at really high levels.

"So we have fewer 15-year-olds now performing at high levels in reading than we did in the year 2000."

Mr Masters says Australia is described as "high quality" in overall performance, but "average" in terms of equity, which suggests more needs to be done to even out the system.

"One of the things that this study shows is again there are big gaps between our Indigenous and non-Indigenous students," he said.

"[There are] big gaps between our lowest and highest socio-economic levels. These gaps are the equivalent of more than two years of school.

"So we have big challenges in Australia, not only in maintaining our high performance and continuing to improve it, but particularly to address the needs of disadvantaged students."

The study also found a number of countries are performing better than Australia in almost every category.

"Of course there are cultural aspects to this; it's a question of how highly education is valued," he said.

"But we also know that a number of these countries have very highly qualified teachers ... and they provide a very good preparation for teachers.

"We know that many of these countries have effective ways of identifying students who are beginning to fall behind.

"So there are probably a number of reasons why these countries are performing better than Australia.

"Often there is a national curriculum but I think that in most of these high-performing countries there is clarity about what teachers are expected to teach and students are expected to learn.

"So there is an attempt to define standards and to set high expectations of schools."