This review summarizes the main findings of an Australian study designed to (1) identify specific tasks and competencies associated with literacy and numeracy, (2) to prepare appropriate literacy and numeracy performance tests, (3) to estimate the percent failing to attain basic literacy and numeracy skills, and (4) to specify relationships between various variables (e.g., sex, age, and race) and the attainment of basic competencies. The sample was composed of 6,628 ten-year-old students and 6,247 fourteen-year-old students. The study found that most students in Australian schools were able to read, write, and calculate satisfactorily so that they could learn effectively from books and were not handicapped in daily life transactions. Nevertheless, a minority of students, approximately 25% of the fourteen-year-old group, who would shortly be free to leave school, had not achieved mastery of basic tasks included in the tests. The review also draws implications from the evidence for educational policy and practice. If a change is to take place, then it must ultimately be brought about by classroom teachers working with children experiencing learning difficulties. It is the responsibility of teacher educators to ensure that classroom teachers are prepared to undertake this important work. (CSS)