The federal School Education Minister, Peter Garrett, said the release of two international studies of reading ability and maths and science proficiency was a ''wake-up call'' that showed ''performance problems in every state, in every school sector''.

Australia ranked 27th out of 45 countries for reading, with 21 of those countries performing significantly better. Hong Kong topped the rankings, with Finland, Russia, the US and England outranking Australia.

Australia's mean score for reading was similar to that of Poland, Lithuania and New Zealand.

About a quarter of Australian students did not meet the minimum acceptable standard of proficiency.

This was the first time Australia had participated in the reading study of year 4 students, the Progress in International Reading Literacy Study, so the results cannot be compared with previous years.

However, Australia has participated in a second test, the Trends in International Mathematics and Science Study, since 1995. The latest figures show some improvement in year 4 maths between 1995 and 2011, but results otherwise flat-lined.

Australia ranked 18th for maths and 25th for science among year 4 students, and 12th for maths and 12th for science in year 8 out of 50 countries.

Professor Geoff Masters, chief executive of the Australian Council for Educational Research, which implements the tests in Australia, said the ''disappointing'' results suggested it would be hard for Australia to gain a place in the top five countries by 2025, a target set by the Prime Minister, Julia Gillard, this year. ''We're staying where we are and others are moving ahead,'' he said.

Results showed a link between schools that reported being under-resourced and those with lower test scores for maths.

But Professor Masters said there was no perfect correlation between high-performing nations and expenditure per student.

''Money is important up to a certain point,'' he said, adding that teacher quality and strong leadership within schools were also significant factors.

Students in NSW performed better than the national average, behind the Australian Capital Territory and roughly on par with Victoria. If NSW was a country, it would sit five places higher on the reading league table of countries. Year 8 students in NSW would rank seventh in the world in maths, ahead of England.

Test results in NSW had the widest gap between high and low performing students of any state.

Mr Garrett did not back away from the 2025 target yesterday, saying that while the results were not good enough, they vindicated reform measures such as those sparked by the Gonski review of school funding.

''These tests show the size of the problem that needed to be fixed, but they do not show that they cannot be fixed,'' he said.

The International Association for the Evaluation of Educational Achievement directed the studies.