Teaching levels for literacy and numeracy are one thing, but students must be inspired to learn early if they lessons are to stay after school, some experts say.

A report by the Australian Industry (AI) Group says the average level of literacy and numeracy across many sectors of the workplace is in a dire state.

Ninety-three per cent of 500 respondents to a survey said their employees' poor literacy negatively affects their business, and may even put workers at risk.

The intellectual situation has become so poor in some industries, managers are turning to bright pictures and clear graphics to teach safety lessons, because they think there is no other way the message will get through.

AI Group chief Innes Wilcox says literacy and numeracy levels are definitely on the decline, and the workforce is beginning to feel it.

“What we're finding is that we are slipping down league tables on proficiency, around language, literacy and numeracy," he said.

“We're now slipping right out of the top ten when it comes to mathematics skills, those basic stem skills - the science, technical education - as well as literacy proficiencies.”

The previous government introduced the NAPLAN system to try to gauge the growing gap in basic knowledge.

Dr Ben Jensen, director of the school education program at the Grattan Institute, says NAPLAN has helped highlight the problem.

“But unfortunately at this stage we're not using NAPLAN enough to say 'well what's working in literacy and what's not?' Or when we do have the evidence, we're still sticking with the same old programs,” Dr Jensen said

“What we need to do is reallocate funding to improving the teaching of literacy and student engagement and development in their literacy,” he said.

“Now this means that the long list of things we require schools to do has to be reduced. If we want to see improvements in literacy, then we must allow schools to concentrate on literacy.

“And that means not asking schools to improve this or that every time a new fad comes up,” Dr Jensen said

A love of learning needs to be planted at a very young age, say the co-ordinator of a free service which delivers books to children in remote communities.

Jenny Riley from United Way Australia's Imagination Library says; “there are key things that little ones need to learn before that age rolls around, because if they're not ready to learn, ready to read, then they won't take up that learning.”

“And so these are basic things such as being able to hold a book and turn the pages, being able to recognise letters. Recognise basic shapes and be able to communicate with their peers.”

“What we know is that those that have done that - had that through early education, mostly, if they've gone to preschool - have picked up these skills... they're the ones who are doing better in year seven NAPLAN, better in year nine NAPLAN, are more likely to complete year 12 and are therefore going on to better outcomes in life,” Ms Riley says.