To those mainlanders whose notions of Tasmania conjure boutique wineries, posh B&Bs and MONA weekends, recent news that half of adult Tasmanians are functionally illiterate and innumerate was an enormous shock. To learn that most Tasmanians consider their secondary education complete at year 10 was incompatible with experiences of posh breakfasts served at Salamanca Place. How can "functional illiteracy" be so widespread in the preferred holiday state of the Australian bourgeoisie?

The Grattan Institute's Ben Jensen was among the first expert to pontificate on the data. The problem, he declared, was that too many small schools are costing too much money; he suggested closing them for more dedicated literacy and numeracy teachers to work in amalgamated city schools.

It is the think-tank way, of course, not to let facts stand in the way of an off-hand policy solution to a problem that, at its foundation, is both complex and disturbing. But if they're serious about addressing illiteracy, experts would do well to look at the $20m currently spent in the state of Tasmania on maintaining a "school of choice" policy of the kind so popular across Australia's neoliberal think tanks.

Under this scheme, parents can choose to send their child to any school in Tasmania, supported by government-hired private transport to combat accessibility issues. In practice, this means that rich kids from Hobart boarding at Launceston Grammar are collected and delivered largely at a public expense that might otherwise be spent on improving literacy and numeracy teaching in less well-resourced schools. As a provision for funded transport is in place, that there are kids who remain in the small state schools reveals that there exist more complex issues of family access and advantage in place that preclude getting a kid to a bus. Note also, there is no actual resistance to amalgamations of state educational services where it is possible to do so. Thanks to Building the Education Revolution funds, Hobart communities successfully negotiated on their own behalf the amalgamation of six smaller schools into two larger ones with improved facilities. In other words, amalgamations have already been made thanks to funding and community participation.

Poor Tasmania, however, is but the scapegoat of a problem – not actually the sole example of it. While the latest data has gone conveniently viral this week, the real issue of adult functional illiteracy and innumeracy of 47% as a national average has been sidelined for some easy cross-Tasman-bashing.

The reason for the nationwide problems with Australian education standards are plain, and it's time to stop listening to think-tanks' sound-byte solutions to process what we already know. Since the election of the Howard government in 1996, a massively disproportional transfer of resources for public education to the private sector has been put in place with the complicity of weak-willed state governments. It was a drift that Mark Latham tried to fight as leader of the Labor party and was destroyed for, just as it was a drift that Julia Gillard tried to redress more gently through the Gonski reforms but ran out of time to implement.

The habit of private-school parents voting to defend a system that disproportionately rewards their already well-resourced schools over disadvantaged communities does not actually improve the quality of their own children's education, although it does create serious disadvantages for children from lower socio-economic backgrounds. While think-tank opportunists condemn the existence of small Tasmanian state schools trying to serve isolated and disadvantaged communities, there are exclusive private schools in Sydney receiving public money despite possessing massive private landholdings and wealth-generating investments.

Private schools implicitly reject any student without the financial luxury to attend them - they admit scholarships only subjectively, and all of their intake is screened. The troubled, the hopeless, the poor, the deprived, the rural and the damned are of greater educational need, yet the public system that is obligated to school them is provided lesser resources with which to do so. The unequal situations of students admitted to both systems is actually structurally enhanced by the present funding arrangements. Tasmanians actually have the highest educational outcomes of kids in the years 3-5 - that this is translating to drop out rates before senior school and adult literacy problems reveals educational disadvantage is a progressive illness.

Ultimately, it's a sickness that will weaken our entire society. A 47% adult literacy problem bodes disaster for developing the knowledge economy that is necessary for maintaining Australian prosperity when the mineral market finally (and inevitably) fails.

It has been long been known that equalising education levels is the single most powerful means for equalising social opportunity, something that provokes horror in those keen to maintain their privilege in the social order at the expense of everyone else. This is why the focus of the wealthy, white, male-dominated cabinet of the Liberal party and their ideological allies in the right and centre-right think tanks address their educational "solutions" towards the superficial and the isolated, so as to distract reasonable criticism away from what should be its true target of reform: a national system that has been deliberately run down to privilege the haves and abandon the have-nots.

Earlier this week, new federal education minister and Liberal party ideologue Christopher Pyne touted a "higher education" shakeup, including considering reinstating caps on commonwealth-funded university places. The announcement was then denied, with Abbott putting the plan on ice yesterday. Still, his government is laying the ground to discard Labor's inclusion targets to raise admissions from low socio-economic backgrounds to 20% for 2020, and abandon Labor's target of 40% of 25 to 34 year-olds holding a bachelor degree or higher by 2025. It's yet another policy manoeuvre to restrict educational opportunity to those who are already privileged, and remove any policy obligation to address the structural inequalities that have already been fostered in the primary and secondary systems.

Pyne defended the abandonment of inclusive policy in the name of maintaining "quality". Of course, what "quality" means in this case is not about educational standards. Not at all. It's about the blessing of class, wealth or incredible luck a student has received long before they've even applied for university– the "quality" of privilege that's provided them with educational opportunity, while half of their fellow compatriots are left without being able to read or count properly.