Canberra was the only Australian jurisdiction to slip backwards in an international study of reading literacy, with a new report revealing the ACT has lost top spot to Victoria and recorded a greater number of students below the proficiency standard than in the same test five years ago.
The Progress in International Reading Literacy Study showed that although 20 per cent of ACT year four students reached the advanced benchmark - the highest rate in the country - a further 18 per cent were ranked low or below low standard.
And despite being an entirely metropolitan area with higher per capita education spending, the ACT slipped behind Victoria on average test scores, losing six points on the 2011 study.
The territory was on par with Bulgaria for its reading literacy results.
ACT Education Minister Yvette Berry said improvements in other jurisdictions' school systems "have in some way brought them in line with ours".
"That said, the ACT performance remains the equal highest in Australia and shows ACT schools teaching literacy and a love of reading across a very diverse group of students," she said.
"As parents, teachers, school principals and the education leaders contributing to the Future of Education process consistently tell me, there's more to measuring the quality of school education than a school's performance on a test at a point in time, so the government's approach to continuous improvement in these areas is deliberately holistic.
"School culture, parental engagement and empowered teachers catering to different student needs are also vital in this mix."
Australian Council for Educational Research deputy chief executive Sue Thomson acknowledged the number of ACT students reaching the intermediate benchmark had decreased between 2011 and 2016, but emphasised that the territory had the highest rate of students meeting the advanced standard.
"Education policymakers in the ACT, as elsewhere, need to ensure that every student in primary school has quality teachers with the resources necessary for literacy development, especially for students who start school with few literacy skills," she said.
Almost 620 year four students from 30 ACT schools participated in the 2016 test. Girls recorded slightly better average scores than their male counterparts.
The number of Canberra children recording below low scores increased from 2 per cent in 2011 to 7 per cent in 2016. Every other jurisdiction except South Australia improved on that measure.
Overall, Australia showed marked improvement in reading literacy, with 81 per cent of students reaching the intermediate international benchmark compared to 76 per cent in 2011.
Just 57 per cent of Indigenous Australian students reached the intermediate benchmark compared to 83 per cent of non-Indigenous students.
The nation ranked 21st out of 50 countries and was significantly out-performed by 13, including the top-ranking Russia and Singapore.
Federal Education Minister Simon Birmingham heralded the results as "[highlighting] the strength of Australia's education system".
"This is an encouraging report card but it's also clear there's no room for complacency," he said.
"Australian educators and policymakers must keep focused on what needs to be done to further boost student outcomes."