Australian children are lagging behind when it comes to developing basic skills in primary school but they are staying in school for longer.
The Australian Research Alliance for Children and Youth's five-year snapshot, released on Sunday, shows Australia ranks 35th out of 40 OECD countries on preschool attendance, although the number of four- and five-year-olds who attend has dropped in recent years.
It also shows three in 10 Year 4 students aren't meeting minimum maths standards while one in four are below standard in science and one in five are not at the required reading level.
The rate of parents reading to their two-year-olds at least once a week has stayed static, although there was an encouraging lift among indigenous families.
Education Minister Simon Birmingham says the concerning figures underscore what the federal government has been saying for some years.
"That is a real worry," he told Sky News.
"If a child is behind by Year 3 in terms of developing basic skills, it's really hard for them to catch up."
However, the news was slightly better for older children, with the proportion of students staying in school through to Year 12 or doing other study increasing.
Australia's 15-year-olds were doing better on international comparisons but across the board about one in five weren't achieving the standard they should be for maths, reading and science.
Senator Birmingham is expecting a report next month by businessman David Gonski's panel on the best ways to spend extra money in schools to lift student outcomes.
The revised funding arrangements that started in schools this year requires states to sign deals with the commonwealth to receive extra federal funding.
"I am confident that what we will be doing is going back to the states and saying that more is required in terms of the focus we place in those early years around foundational skills," Senator Birmingham said.
"We're not going to be passive players in education."
The ARACY report also showed Australian children are falling behind in immunisation rates while facing rising rates of mental illness, and highlighted the vulnerability of Aboriginal and Torres Strait Islander youth in particular.
The good news is smoking among young people is the lowest in the developed world and Australia continues to lead in areas such as life expectancy and how much time parents spend with their children.
ARACY chief executive Stephen Bartos summarised the report card as "Australia: trying hard, could do better" and called for a minister "with cross-cutting responsibility for children at the cabinet table" to tackle the issues.
