Australian students are performing better than their average overseas peers, but those from disadvantaged backgrounds are about five years behind in their schooling.
Education performance in Australia is above average in maths, science and literacy, according to the Programme for International Student Assessment for 2022 by the Organisation for Economic Co-operation and Development.
But on average, 15-year-olds from poor families are falling far behind in in the core subjects, and Indigenous students are also four years behind.
Students from regional and remote areas were also at a disadvantage, compared to their city-dwelling counterparts.
The outcomes are similar to recent NAPLAN results and recent findings from the Australian Education Research Organisation (AERO).
"Australia has a good education system, but it can be a lot better and fairer, and these results again highlight this," Education Minister Jason Clare said in a statement.
"We have to fix the funding gap and fix this education gap.
"That's why I want the school funding agreement we negotiate next year to tie funding to the sort of things that help children who fall behind to catch up, keep up and finish school."
More than 690,000 students from 81 countries took part in PISA 2022, including a representative sample of 13,437 Australian 15-year-old students from 743 schools.
It is the first study to examine the academic progress of students in dozens of countries during the pandemic and pointed to an "unprecedented drop in performance", it said.
Australian Associated Press