Teachers who take jobs in subjects or schools that are hard to staff should get more pay, the Productivity Commission has recommended.
As well, there needs to be a clear performance-based career progression to reward quality teachers.
In its report on Australia’s schools workforce, released on Friday, the commission makes 13 recommendations based on 10 key findings.
There are now more than 250,000 teachers in Australia.
While there are surpluses of primary school teachers in urban areas, there are also ongoing difficulties in filling positions in rural and remote communities, and a range of secondary subjects including maths and science.
The commission found that up to 25 per cent of teachers were teaching subjects they were not qualified in because of shortages.
It recommended governments use a program to give principals more autonomy to trial pay incentives to attract teachers.
The commission noted financial incentives for teachers who worked at rural and remote schools were widely used and accepted.
“In the commission’s view, subject-based pay differentials are no less valid for helping to deliver good student outcomes than location-based allowances,” the report states.
To help raise money to pay for this, the commission recommended the government phase out a discount on university fees for education degrees, which it said was “not the best use of scarce education funding”.
The report also criticised efforts to reduce class sizes over the past 50 years as “a costly policy that has not translated into a commensurate improvement in overall student outcomes”.
Instead, it recommended moving to a wide range of class sizes and use savings to help fill shortages.
The commission said teacher salary scales were quite flat, with most reaching the top pay level in about 10 years.
Pay increments were supposedly connected to teacher performance but in reality were hardly ever withheld.
It found clear evidence that many teachers were failing to receive the feedback and support they needed.
It recommended central agencies help individual schools improve teacher performance appraisals.
Schools Minister Peter Garrett said the government had already started working on this, and was looking at a national appraisal system.
The commission also said principals should be given the power to discipline or fire underperforming teachers.
“There is a widespread perception among teachers that sustained unsatisfactory performance rarely leads to dismissal or other disciplinary action,” the report states.
“This is consistent with published statistics.”
It said efforts to improve teacher quality should not focus on the payment of bonuses.
The government has already proposed a reward payments system, to start in 2014.
The Productivity Commission recommended this be turned into a temporary scheme that let the government develop in the long term a performance-based career progression.
Under such a scheme, teachers would progress through several classification levels based on merit.
Pay would not be automatically linked to gaining a higher classification, but it would open up more positions teachers could apply for.
The commission noted the extensive reforms Labor has begun.
It said there were a number of strengths in these but it was too early to judge the full impacts.
Mr Garrett welcomed the recognition and said the government had already started working on similar measures to some of those recommended.
“The Gillard government is committed to improving the Australian schools workforce so we have the best teachers in every classroom,” he said.
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