Last week's Programme for International Student Assessment results reveal Australian students have fallen nearly two academic years behind students who went to school in the early 2000s. Nearly half of pupils do not reach national standards in maths and reading.

Why? We can safely rule out all the educational hyperbole about class sizes, phonetics, open or closed classrooms, teacher training and the like.

Instead, we should look at the one distinguishing feature of the Australian education system among developed countries over the past quarter century: ever increasing enrolments in private schools. We should look at why that is the case and the horrible effect it is having on overall educational standards.

In NSW, more than 20 per cent of students are "low performers". They do not have the skills and knowledge to enter the workforce.

Australia-wide, the proportion of low performers in maths, reading and science has doubled since 2000. The number of high-performing students has fallen.

Fifteen-year-olds from disadvantaged families are five years of schooling behind those from advantaged families. Indigenous students are four years behind.

All this is despite (or perhaps because of) the 2019 $320 billion funding deal between the federal and state governments.

In Australia 35 per cent of students go to private schools. In France it is 26 per cent and New Zealand is only 11 per cent. Then a whole swag of mainly European countries have under 10 per cent, and mostly educate their children as well if not better than in Australia.

More importantly they do not have the shocking inequities that Australia has. These inequities damn children born into poor families to poor education and poor life chances for no fault of their own. It creates a vicious intergenerational cycle. Australia is no longer the land of equal opportunity (if it ever was).

(Belgium and the Netherlands, by the way are special cases with high private proportions, but their private schools must take all students.)

In Australia, only one in five students went to private schools in the mid-1970s, the great majority in the Catholic system. And the great majority of them were not in elite schools. In those days the system was much more egalitarian than now.

Now more than one in three go to private schools - most of the increase coming since 1995. The increase has come at the same time as the increase in federal funding for education.

That federal funding for education has overwhelmingly gone to private schools. This year the Commonwealth provided 80 per cent of the total government funding for private schools. It provided only 20 per cent of total government spending on government schools.

The federal subsidies mean that private schooling has been within the reach of more of the middle class. It has also meant that, by and large, private schools have better educational outcomes because they get money from both fees and government grants.

So, more students from the middle class now go to private schools and fewer go to government schools. With the loss of many middle-class parents, government schools lost articulate voices for the sector. And the private schools gained them.

Politically, it has meant there are more votes in giving more money to private schools usually at the expense of public schools.

It has meant more money being given to schools which are already providing good education. So, the money is going to non-educational things - chapels, swimming pools, and very high salaries for the schools' CEOs (sorry, I mean principals).

True, government is not allowed to be spent directly on these things, but to the extent that government money goes directly to educational things, it frees up money to go to non-educational things.

When the excellent 2011 Gonski reforms recommended needs-based funding in 2011, you could hear the squeals of protest from the private schools from Broome to Hobart.

The government caved in and adopted a "no school will be worse off" policy.

It meant that precious money which could have gone to the low-hanging fruit in disadvantaged areas was effectively squandered on non-educational things in advantaged areas - where it does not improve already-good educational outcomes.

Of course, the result has been a lost opportunity to pick up Australia's overall educational performance, as illustrated in last week's results.

True, last week's results show Australia moving up a bit compared with other countries. But that is because those other countries' results are even worse than Australia's. Overall, since 2019 we have marked-time or gone backwards in each element tested.

In short, the ideologically driven policies to create a class divide in Australian education has failed our students.

What is to be done? The simple, but politically difficult, solution would be for the federal government to extract itself from allocating education money. Rather it should hand a lump sum over to the states and let them allocate it.

MORE CRISPIN HULL:

The Constitution does not give the Commonwealth any power to make laws with respect to education per se. But it can use its money-raising power to give money to the states under whatever conditions it wants - even down to directing money to particular schools.

Usually, once government money is given to an entity (such as a school) it is very hard to take it away. But the federal government should look forward to the day when it no longer has to put up with the whingeing from the richly undeserving private schools.

At present the bloated funding that goes to private schools is such that the federal government would be better off if a new student went to a government school than a private school. It would cost the federal government more to fund the private student.

State governments would allocate money much more fairly and effectively than the way the federal government has been doing it for the past quarter century.

If you want private schooling, you should pay for the whole lot. Otherwise go to the public system, which would be vastly improved with an injection of articulate, middle-class, monied families.