UNIVERSITIES have slammed a federal government decision not to increase their funding as a lost opportunity to boost productivity and economic growth.
Tertiary Education Minister Chris Evans responded on Monday to the 2011 higher education base funding review by pointing to the "unprecedented investment" Labor had made in universities since 2007.
"Given the record investment in recurrent and capital funding for our universities made by this government, there will be no further general increase in base funding at this stage," Senator Evans said in a statement.
He cited an Ernst & Young report which last year found that funding per student place had grown by 10 per cent with Labor's increased investment.
Universities Australia chief executive Belinda Robinson said the government's response was a "disappointing dismissal" of the report's call for increased funding.
"At the very time the government is placing education and research at the centre of its agenda for economic and industrial renewal, underfunding our universities puts in jeopardy Australia's ability to remain internationally competitive," Ms Robinson said in a statement on Monday.
"Our universities drive the skills and innovation needed to lift Australia's future competitiveness and to diversify the economy."
Senator Evans said universities had to maintain international competitiveness and they must increase productivity, like any other sector of the economy.
"The great challenge for universities over the next few years will be to ensure that the significant additional funding from the government does not make them complacent about the actions they need to take to constrain costs and look for ways to be more efficient," the government's response states.
The base funding review, released in December 2011, recommended an increase in the average level of base funding.
It also recommended that all students pay 40 per cent of their course costs, with the commonwealth providing the balance.
The review panel, led by Jane Lomax-Smith, found the existing system, where student contributions range between 19 and 85 per cent, was "inequitable".
Senator Evans ruled out increasing student contributions.
"The Gillard government does not want greatly increased debt to burden young people well into their working lives," he said.
The review did not seek to charge existing students higher fees but proposed new undergraduates entering courses where the contribution was below 40 per cent could see fees rise "in a sequence of smaller steps".
Courses with student fees above 40 per cent would have had those fees frozen until indexation brought the government contribution up to 60 per cent.
The government says having a single contribution rate for all courses would introduce new inequities.
"The potential private benefits from some courses are sufficiently high to justify differential student contributions rates," it states.
The government also rejected a recommendation that universities be allowed to develop "flagship programs" which would attract up to 50 per cent extra funding per student.
It accepted, in full or in part, 13 of the panel's 24 recommendations.
Senator Evans said the review's findings had informed commonwealth policy over the past year.
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