A Productivity Commission report released on Thursday showed a 0.3 percentage point drop in the number of Tasmanian grade 7 students going on to complete year 12 in 2014, leaving the yearly figure at 68.4 per cent.

While the study's exclusion of TasTAFE and VET program students at least partially accounted for Tasmania's failure to reach the 84.6 percent national standard, the state has also experienced minimal improvement to its low rates over the past 10 years.

In the period between 2005 and 2014, only the Northern Territory experienced slower retention rate growth than Tasmania's 1.3 percentage point rise from 67.1 per cent.

By contrast, South Australia recorded a jump of 22 percentage points to reach 93 per cent in 2014, while Western Australia rose 13 percentage points to reach 89.3 per cent.

Education Minister Jeremy Rockliff said while the statistics were challenging, there was also cause for encouragement, with year 10 to year 12 retention rates experiencing a 2 per cent boost from 2013.

"It is results such as this that motivate us as a government to make changes that will encourage young Tasmanians to stay in school longer," he said.

"There is certainly a lot more work to be done and many improvements to make but we are committed to doing everything we can, including accelerating the roll-out of the year 11 and 12 program and extending it to urban schools too."

Mr Rockliff said he expected the $45 million high school extension program would go a long way to boosting retention rates.

"In 2015 the first six high schools extended to years 11 and 12, and we have seen some very encouraging results with an average 38 per cent increase in enrolments at those schools," he said.

"This year, another six schools are extending."