Australia's universities are slowly "being squeezed to death" by federal government cuts, according to the Federation of Australian Scientific and Technological Societies.
Peter Cullen, the federation's president, said the nation's universities were at the crossroads and called on the government to "sort out the mess in our universities before it is too late".
The quality of Australian science was being affected by increasing workloads and a failure to renew equipment and laboratories, he said.
Australians should view public support for research and development as an investment rather than a drain on the public purse and should look to the massive boosts to research budgets by governments in Britain and America.
"These governments have taken a hard-headed look at the benefits - new industries, new well-paid jobs, a better quality of life through technological advances. They have done their sums and can see that the investment pays off," he said.
"There are a number of studies showing how investment in research and development pays off but they all use a different approach. If we can establish a common methodology we can assemble a cast-iron case showing that the high-technology, high-salary path is possible for Australia."
The Australian Vice-Chancellors' Committee said that continued efficiencies through enterprise bargaining with staff over wages and conditions were not possible under the current funding system without "fatally damaging teaching and research quality".
AVCC president John Niland said that if the universities could reach agreement with the government over the cost of wage claims and other movements in pay, the institutions could achieve certain realistic efficiency outcomes.
He urged the government to use its 1999 budget to address urgent priorities for universities, including an appropriate mechanism that recognised the wage cost pressures universities faced.