This Grattan Institute paper draws on national data to show that around 40% of Australian students are regularly unproductive in class — and that the majority of these are not disruptive but quietly disengaged. It makes the important point that passive disengagement is just as damaging to learning outcomes as acting out, yet far less likely to be noticed or addressed. The report argues that classroom climate — shaped by teacher expectations, relationships, clarity and active participation — is a decisive lever for engagement, and that Australian teachers are under-prepared and under-supported to use it effectively. With specific relevance to Years 7–9, it highlights that disengagement is significantly worse in low-SES schools and calls for systemic reform to teacher training, school leadership practice and data collection. Its recommendations are evidence-based, Australian in context, and directly actionable.