Australia¡¯s tertiary education minister, Craig Emerson, announced over the weekend that A$2.3 (?1.6) billion in cuts would be imposed over the next four years to help pay for school reforms.

He said A$900 million would be raised through an ¡°efficiency dividend¡± of 2 per cent imposed on university funding in 2014, falling to 1.25 per cent in 2015.

A further A$1.2 billion would be saved by requiring students to pay back ¡°start up¡± scholarships, and $230 million by abolishing a 10 per cent discount currently given to students who pay fees upfront.

The announcement is a huge blow to Universities Australia, which earlier this year launched a A$5 million lobbying campaign ahead of September¡¯s federal election to highlight the need to invest in higher education.

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Universities Australia¡¯s chair, Glyn Davis, vice-chancellor of the University of Melbourne, said the cuts came on top of the A$1billion that was ¡°stripped out¡± of Australia¡¯s research budget at the end of last year.

He admitted that Australian universities had enjoyed a ¡°very substantial period of growth in income¡± in recent years, during which the Labor government had removed the cap on undergraduate numbers. He also admitted the government was ¡°confronting difficult economic circumstances¡±.

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But he was concerned about the long-term impact of the cuts ¨C which will see average per-student funding fall from A$9,400 to A$9,200 ¨C would have on Australian universities¡¯ ability to ¡°meet the high standards of educational quality expected of them¡±.

¡°For students, the loss of a range of income support measures will be compounded by the inevitable withdrawal of existing academic and professional support services provided by universities,¡± he said.

Mr Emerson declined to rule out further cuts, but said the uncapped system would remain. The ¡°efficiency dividend¡± would only see growth in university budgets ¡°moderate¡±, he added.

He also defended the use of the money saved to implement the recommendation of a government-convened commission on school funding chaired by businessman and University of New South Wales chancellor David Gonski.

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¡°To have the best universities we have to have the best school classrooms¡­We are implementing a once-in-a-generation opportunity to make sure that every young child in Australia gets a high-quality education,¡± he said.

Mr Gonski said his commission was not asked to consider how his recommendations should be funded.

¡°As chancellor of¡­New South Wales, I¡­will continue to advocate that increases be made in funding the university sector,¡± he said.

Jeannie Rae, president of the National Tertiary Education Union, expressed fears university managers would react to the cuts by trimming jobs.

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¡°Not only have universities not employed sufficient staff to match the rise in student numbers, but too many new and replacement appointments are casual or short term,¡± she said.

Australian universities are currently beginning a series of negotiations with unions on new ¡°enterprise agreements¡±, which govern staff terms and conditions. The negotiations at the University of Sydney have already led to strike action.

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paul.jump@tsleducation.com