The government has stopped the process which allowed universities to “write their own cheques,” Education and Training Minister Simon Birmingham said last night, adding that the system “should recognise they have had enormous growth and should treat yesterday’s announcement of a two year freeze on funding as “an efficiency dividend by other means.”

Senator Birmingham was commenting on core measures in yesterday’s Mid-Year Economic and Fiscal Outlook, which froze Commonwealth Grant Scheme funding for universities at 2017 levels for the next two years and ended the present demand driven funding model, under which the government pays universities to teach every domestic undergraduate they choose to enrol.

The minister added there was nothing to stop universities continuing to enrol as many students in whatever disciplines as they choose and that they would still receive funding for those students’ contributions to course costs if they did. However, he noted that growth in demand for places had already slowed.

Nor would there be a return to uncapped growth when the two-year freeze on funding  ended saying, “our policy is now settled.” The minister added that future growth would be based on universities meeting specific targets. While these are yet to be set, Senator Birmingham said he hopes the measures include student experience, attrition and completion rates and graduate outcomes, adding “we have two years to get this right,” and that “there is ample time to consult” with universities.