The Grattan Institute’s latest report card paints a grim picture of student behaviour, finding 40 per cent are disengaged in the learning process.
School Education Program Director with the Institute, Pete Goss, said disengagement is widespread and not necessarily a result of aggressive or anti-social behaviour.
"It's now increasingly clear, that a large number of students, about four in every 10 students, are disengaged in their learning."
"They're passively disengaged, they're finding ways to avoid work, they might be late for class. It's a real problem, because those students are one to two years behind in their learning, as much as the students who are acting out."
Mr Goss said he fears that if schools and universities fail to address the problem, it may lead to teacher burnout, with teachers already reporting increased levels of stress.
The Institute recommends re-training teachers to better manage challenges and introduce new practices in the classroom.
A mentor also helps, but Australian teachers rarely have that option, unlike some other nations.
"Contrast that with what happens in Shanghai, a high performing system, and every new teacher has two mentors - one for the subject they're teaching, and one for classroom management."
One key to engaging students is enlightening them as to why they're at school.
That's the model adopted by Hume Central College in Melbourne's northern suburbs.
Called 'school wide positive behaviour', College principal, Irene Iliadis has introduced events such as a fashion show to model correct ways of wearing the school uniform.
“Engagement is about finding ways to make learning meaningful and relevant to young people. They need to know that somebody knows them, and wants to work with them,” she told SBS.
“We can't, any longer, say 'you will do this, because I say so'. We don't do it at home, we don't do it out in the community, so schools have had to modernise."
Ms Iliadis says the school has seen a 50 per cent drop in class disruptions, and a dramatic improvement in attendance, behaviour and performance.
"It's more the tone that you take, that's pivotal, for that person to know that you care, and what you want is the improved behaviour, and not the 'get out, I don't want you in this class'.”
Students like Irem Duman, who has just started year 12, have noticed.
“You can definitely see, like the rewards they give you, and the chances and opportunities they give you, for you to study and achieve something in life."