Australia must reform its public education system and set high standards for schools to ensure they become more internationally competitive, media mogul Rupert Murdoch says.

Mr Murdoch on Sunday said that schools and school systems must stop making excuses for failing the children they are meant to serve, especially those from disadvantaged backgrounds.

And Australian businesses must take an active role in the reform process, he said.

The News Corp chief and Manhattan-based US citizen used the fourth of his six Boyer Lectures for the ABC to focus on the state of public education, saying the school system in Australia, along with the US and Britain, is a “disgrace”.

He said these countries had fallen behind the likes of Finland, Korea and Singapore.

“In my view, things will not really improve until we begin setting much higher expectations, for our students, for our teachers and for our schools,” Mr Murdoch said in his lecture entitled Fortune Favours the Smart.

“At the very least, setting higher standards means we ought to demand as much quality and performance from those who run our schools as we do from those who provide us with our morning cup of coffee.”

While more and more money was being spent on public education, children, especially those among the most vulnerable in society, “seem to be learning less and less”.

“The children of poor people always have fewer options than the elite,” Mr Murdoch said.

“For these people, a solid education is the one hope for rising in society and levelling the playing field.

“If we have any real sense of fairness, we owe these children school systems that hold them to high standards.”

He has called on the federal government to set high standards and hold the states accountable for meeting them.

“The bad schools don’t pay for these fundamental failings,” he said.

“The students pay the price because they are the victims when our schools fails.”

He said Australian business must take an active role in the reform, with companies working with government to ensure schools give the nation’s youth a proper education.

“As business leaders, we know how unprepared too many young people are for the working world,” Mr Murdoch said.

He said new technology was making many tasks redundant, resulting in fewer satisfying jobs for those without skills.

And while society had its highly-driven self-starters, for every Steve Jobs who dropped out of college and founded a company like Apple, the US computer giant, there were tens of thousands who closed the door on opportunity by leaving school early, he said.