Vice chancellors met in Canberra yesterday as the implications of the end of the demand driven system and two years of funding cuts sink in. For the University of South Australia’s David Lloyd the challenge is both practical and political. For a start, he wonders how he will pay for places already committed in pathways programmes, including for students in regional SA, already grossly under-represented in university. And where will the engineers needed to staff the $90bn defence construction plan come from when the cost of teaching them is already underfunded by 20 per cent. As for nursing, “our funding does not pay for clinical placements,” he says.

Politics will also be an issue as the government allocates growth places from 2019 on a now unknown basis. “I have a sneaking suspicion there will be sweetheart deals in regions and marginal electorates,” Professor Lloyd warns.

Rather than wait for disaster he says universities must start a debate now on what is to be done. “We need to convey this to the community, it can’t be just us talking to ourselves.”

And that conversation needs to address realities. For a start he dismisses suggestions that universities spend munificently on marketing and what they do spend is inevitable, given the nature of the demand driven system, until its recent end. And he rejects claims that the system is awash with cash. “There were six universities in deficit last year and best guess is there will be eight this – that’s 20 per cent.”

Professor Lloyd says it is all very well for the government to talk about allocating future places on the basis of performance, but the metrics will need meaning. “Employability! Good, but what does it mean,” he asks. But the vice chancellor does not dismiss the Quality Indicators for Learning and Teaching, “QILT sampling needs to be better but it asks the right questions – I like the transparency.”

However getting the rewards measurement will have to be part of a broader discussion about “what universities should look like.”

That will be a debate that inevitably involves politics. While Professor Lloyd says while he sees no “political heat” around the minister now, “it will be a local issue which will put pressure on Canberra to address the level and allocation of funding.

“I am not looking for a hand-out but some conversation on how to flex the system to meet needs,” he says.

But the first discussion will be with UniSA staff in a fortnight to talk about how to fund growth this year. Given Professor Lloyd says the end of the demand driven system “is a cap on ambition” and that his state “does not get a fair bounce” the reason he continues committed to grow is clear.