Staff and students unite to damn Canberra's voucher plan

Australia's vice-chancellors, academics and students have flatly rejected federal government proposals for voucher-style funding of higher education.

The government had suggested alternatives to the way federal grants were allocated to universities, including full deregulation of student fees and two voucher schemes involving "learning entitlements".

Under the voucher system, students would be able to cash in their entitlements at the university of their choice. But institutions would be free to set their own charges, with any difference between the fee and the voucher covered by student loans.

The Australian Vice-Chancellors' Committee dismissed the voucher ideas and insisted the government should provide more money for higher education.

AVCC president Deryck Schreuder said universities needed an increase in federal funding and that point was fundamental. "Total deregulation is not the answer," Professor Schreuder said. "Our members are in agreement that a fully deregulated market in student fees and university places is not appropriate. We need a solution that not only recognises the key differences across the sector but provides the best outcome for the nations' students."

Academic and student groups also expressed opposition to fee deregulation and the introduction of learning vouchers. Both have called for a substantial increase in federal spending.

Education minister Brendan Nelson has initiated a full-scale review of higher education. The proposals on funding gave no indication that the government was intending to boost spending on higher education, although Dr Nelson intimated that more money might flow if universities accepted his reforms.

The funding paper also shows that federal grants, excluding money allocated to research, comprise only 31 per cent of university income - down from more than 80 per cent a decade ago. Student fees now make up almost the same sum as that contributed by the government.

The Labor opposition's spokeswoman on education, Jenny Macklin, said the government had slashed A$3 billion (£1 billion) from university funding since taking office in 1996. Ms Macklin said not one of the proposed funding options provided for increased public investment in universities.