Australian Prime Minister Julia Gillard and New Zealand Prime Minister John Key pledged on Wednesday $250 million to boost education opportunities for poor Pacific Island children, the Herald Sun reports.

They made the promise at the Pacific Islands Forum in Auckland, which was celebrating its 40th anniversary. The forum counts 16 member-nations.

The two leaders target a 75 per cent literacy rate for all Pacific Island kids by age 10 by 2021. Helping the youth of poor neighboring islands learn to read and write will improve prosperity in the region, Ms Gillard said.

The funding is expected to benefit about 500,000 poor children in the Pacific Islands where almost one million school-aged youth do not go to school.

Besides funding education for young people, the two prime ministers each pledged to provide three post-graduate scholarships.

Ms Gillard and Mr Key also announced the expansion of guest worker programs and supported labor movement in the region.

Before she became prime minister, Ms Gillard served as Australia's education minister. During her term in 2007, she worked for the extension to 2012 the funding scheme for non-government schools which was introduced during the term of John Howard.

However, in an opinion piece in 2010 published by The Sydney Morning Herald, Age senior columnist Kenneth Davidson described Ms Gillard's stint as education minister as a failure.

"The major initiatives introduced by Gillard under the rubric of the education revolution were bad policy from the perspective of education as a public good, and even worsen administratively," Mr Davidson wrote.

He pointed to second computers, loos that are not working, leaking roofs and a disproportionate number of traumatized refugee children and kids from households with English as second language as proofs of Ms Gillard's weakness as education minister.