The Fourth R: What is the place of religion in Australia's 'free, compulsory and secular' schools?

By 1880, all Australian colonies had passed legislation guaranteeing their children 'secular' education and ending all public funding to religious schools. Today, fewer Australians attend church or identify with a religion. However, more than one-third of Australian students attend private schools, over 90% of which are Christian, and which receive ever-increasing government funding. Meanwhile, religious activities in public schools take numerous forms. How should schools in multicultural, multifaith Australia handle the "Fourth R"?