But the ACT Education Directorate said it planned to do more to directly address a trend in parents withdrawing their children from NAPLAN because of philosophical objections.

Based on the average score achieved by students, the ACT came first or equal first in 19 of 20 categories across reading, writing, spelling, grammar and punctuation and numeracy throughout Years 3, 5, 7 and 9 in 2014.

But the ACT has also posted a falling participation rate in NAPLAN, due to some of the highest withdrawal rates across the country – particularly in the primary years – suggesting parents were boycotting the tests on moral grounds.

Across Year 3, the ACT recorded an almost 5 per cent withdrawal rate across the board. This compared with a national withdrawal rate of 2.7 per cent. Where other states had high absenteeism rates – between 7 and 9 per cent in the Northern Territory – the ACT had the second lowest rate of absenteeism in Year 3 after NSW of just over 2 per cent.

Absenteeism is when a child is sick or does not attend school on the testing day. Withdrawals are when parents pull children out of the testing regime. This indicates that parents were consciously pulling their students out of the test because they did not condone NAPLAN or felt it was too stressful for their children.

Despite its excellent results, the ACT had lower participation rates than the national average across every testing measure.

The ACT came first or equal first on all measures except for Year 3 persuasive writing, where Victoria came top. This takes into account standard margins of error.

The ACT also posted the highest percentage of students achieving the minimum standard across all but five domains – coming second to Victoria in Year 3 persuasive writing, second to NSW in Year 3 spelling, second to Victoria in Year 5 persuasive writing, third to Victoria and Western Australia in Year 9 persuasive writing and third to Victoria and NSW in Year 9 spelling.

Overall, the ACT excelled in Year 7, particularly in spelling, reading, grammar and punctuation.

The Australian Curriculum, Assessment and Reporting Authority, which administers NAPLAN each year, has expressed some concern about the ACT's high withdrawal rate.

ACARA's general manager, assessment and reporting, Dr Stanley Rabinowitz, said: "Participation in NAPLAN remains high and sufficient to provide reliable and robust achievement data, however, parents who withdraw their children from the NAPLAN tests are choosing to not benefit from a second set of eyes on how well their children are doing, relative to other students their age across the country. Every student should know how well he or she is going, against the standards and in comparison with his or her peers".

The Australian Education Union's ACT secretary, Glenn Fowler, said the high withdrawal rate in the ACT should be celebrated.

"I think ACT parents are well-informed and recognise the limitations of the NAPLAN test."

He noted increased stress within schools around test time and said some parents were rightly concerned about the effect a large-scale external test would have on their child's welfare.

"It seems we are winning the argument about NAPLAN being just one measure and one which should not be used to define a child's educational experience."

Withdrawal rates remained the highest in the nation but lowered slightly to 3.8 per cent across Year 5, compared with a national average of 2 per cent.

By Year 7, ACT withdrawal rates lowered to 2.7 per cent and were beaten by Queensland on 4.1.

But by Year 9, they increased again to 4.8 per cent, with Queensland on 5.6 per cent.

It should be noted by Year 9, absenteeism had also increased dramatically across all states and territories reached 5.5 per cent in the ACT in line with national trends.

The ACT Education Directorate's director of planning and performance, Tracy Stewart, said she understood parents had the right to withdraw their children but wanted to ensure they had accurate information before making that decision.

The directorate wanted to reverse the trend in withdrawals and was considering a range of actions next year including sending a letter directly to parents to encourage them to reconsider taking their children out for the tests.

ACT Education Minister Joy Burch welcomed the ACT's performance. She noted that ACT Year 9 students – who were the first to sit NAPLAN as Year 3 students in 2008 – were ranked equal first in all 20 areas.

"We have seen significant improvements this year for Year 3 reading and grammar and punctuation, and Year 5 reading, spelling and numeracy when compared with the 2008 results."

Speaking also as chair of the national Education Council, Ms Burch said that across the country there had been some moderate increases in reading for Year 3 and Year 5 students but results for persuasive writing had decreased since 2011.

NAPLAN is a nationwide test undertaken by 1.1 million students across more than 9,500 schools nationwide. Of these, 18,000 Canberra students sit the May tests.