A Grattan Institute report, to be released today, shows Australian performance has slipped since 2000, with maths students now more than two years behind children in Shanghai and one to two years behind children in Hong Kong, Singapore and South Korea.

Australian students are still ahead of children in the United States, Britain and EU countries in reading, maths and science but results have dropped by 13 points on the OECD's Program for International Assessment score.

The report comes on the eve of the release of the biggest review of Australian schools funding in more than 30 years. On Monday, the government will release a review by businessman and academic David Gonski and its response to his report.

The Grattan Institute research turns much accepted wisdom about education in Australia on its head. It shows there is no clear link between school funding levels and good test results, with South Korea spending less than Australia on students and performing better than them in a range of subjects.

Nor do smaller class sizes guarantee good educational outcomes. Teachers in Shanghai spent 10-12 hours directly teaching their students each week, working with an average class size of 40 students.

In Australia, with average class sizes of 23 students and an average 20 hours of teacher time spent with students each week, the children were between one to two years behind Shanghai students in reading and science, and more than two years behind in maths.

Between 2000 and 2008, average expenditure per student rose by 34 per cent across the OECD and by 44 per cent in Australia. But by 2009, Australian students' performance had fallen by the equivalent of three months compared with 2000 results. During the same period, Korean students had increased their scores by more than three months.

The Grattan Institute school education program director, Ben Jensen, said the report showed the Gonski review was only part of the solution in addressing schools' performances.

''I don't think it's looking at the wrong thing. I just don't think it's the main game,'' he said.

''Let's look at funding but let's resolve it quickly and move on to the main game. Funding has dominated Australian education for a decade and we really shouldn't care what school a kid goes to, we should care why their outcomes aren't improving.''

The report found the key to improving students' results was improving teaching and the resources put into teaching.

The successful school systems studied - Shanghai, Hong Kong, Singapore and Korea - had several philosophies in common.

They placed great value in the early stages of teacher education (Singaporean teaching students are paid civil servants), they provided teachers with mentors and they treated teachers as researchers.

The Education Minister, Peter Garrett, was not available for comment.