Overall, I think students and society are largely to blame for this issue. A lot of pundits and politicians refuse to admit the underlying cause of these issues simply because there are easier scapegoats. The left blames a lack of funding whilst the right blames teachers.
The harsh truth is students are largely unmotivated because Australian culture promotes an environment where academic success is not truly valued or properly rewarded. Australia has a very laid back, "She'll be right mate" type culture and ultimately, academic success isnt as valued as it would be in say China, Japan etc. I think that's why outcomes are better for 1st generation Australians (second link).
Having completed a degree and worked for several years in HR, I've seen first hand how little academic performance matters to success in Australian society. Almost anyone can go to university and get a degree these days as the threshold for entry into most courses is extremely low. Ultimately, what incentive is there to get a high ATAR and perform well in school when you can pretty much get into any course with a low grade or transfer in to your desired course after 6-12 months? I myself received a relatively high ATAR and realistically, I finished university with the same degree as some people who got in the 50s and 60s. In countries that do perform better from an educational standpoint, Im willing to bet that a poor score on their high school exams would probably condemn a person to a lifetime of sweeping toilets for a living.
Furthermore, academic performance counts even less for getting a job post-graduation. Beyond graduate programs (which make up only 20% of the graduate recruitment market), university grades are a complete non-factor in getting an entry level role. Even in the case of graduate programs, the standard is usually quite low (Credit average) and grades are usually a checkbox item. At the end of the day, businesses in Australia emphasize that university grades aren't really a key factor for them and it's more about soft-skills. Whether that's right or wrong is a separate issue, but the effect essentially minimizes the value of education.
At the end of the day, necessity is the mother of all innovation. With the attitude and values of Australian society, you cant blame students for being unmotivated. If you raised the academic standards needed for uni entry and the jobs market, I'm willing to bet that performance will increase markedly.
