Australian schools are in deep trouble and students will continue to slip behind in reading, maths and science unless there is urgent action from all governments, a new report has warned.

It's a grim picture of the country's education system, where high school students lag behind global standards, there is growing inequity and teaching has become an increasingly unattractive career.

Australia was "drifting backwards", said the author of the report Geoff Masters, chief executive of the Australian Council for Educational Research.

"We ignore these warning signs at our peril ... Unless we can arrest and reverse those trends we will continue to see a decline in the quality and equity of schooling in this country," he said.