The peak body representing Australian universities has urged the Turnbull government to finally abandon the 20 per cent funding cut to universities originally proposed in the Abbott government's politically-toxic 2014 budget.
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Universities Australia, in its submission on higher education reform, says the cut would drive down the quality of universities, stymie the government's innovation agenda and could harm the lucrative international education market.
The cut has been described as a "zombie" measure because it remains baked into the government's budget projections despite being rejected twice and has little hope of passing the Senate.
But abandoning it would blow a $3.2 billion hole in the budget.
While accepting the need for some savings, Universities Australia says it will not accept any overall reduction in student funding.
"Australia's world-class university system is evolving to support the dramatic transition under way across the economy and workforce – a process that cannot be achieved while making cuts on this scale," Universities Australia chief executive Belinda Robinson said.
"The magnitude of these cuts will not only put at risk the quality of the higher education provided by Australian universities, they are at odds with the Government's ambition to reinvigorate the economy through education, research and innovation."
The government has ruled out the full deregulation of university fees, which would have allowed universities to recoup the 20 per cent reduction in funding.
Universities Australia also notes that the majority of Australian universities are opposed to the government's proposal to introduce a new tier of deregulated "flagship" courses.
"While some members have indicated a preparedness to further explore the concept of 'flagship' courses, for example in relation to unique or particularly innovative courses, the majority oppose the proposal on the basis of implementation complexity, the likelihood of perverse outcomes, the potential to devalue existing degrees, and the potential creation of a 'two-tier' system," its submission says.
Universities Australia says the government could save money by further reducing the HECS repayment threshold and increasing the repayment rate for high-income earners.
The group also says debts should be recovered from those who can pay but currently do not. This is a nod to proposals floated by the government to collect HECS from deceased estates and introduce a new family income test so graduates with high-income partners pay back their loans even if they are not working.
The government plans to force graduates to repay their student loans when they start earning $50,638 rather than $54,126 currently - a policy backed by Labor during the election campaign.
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