Australia's universities could be thrown into turmoil as they begin enrolling students for the 1996 academic year next month, after higher education unions failed to achieve a significant pay increase for their members.

The federal Labor government has refused to provide Commonwealth funds to meet the cost of the 15 per cent increase sought by the unions. Although the government has agreed to a 5.6 per cent salary rise for academic and general staff, it has imposed tight restrictions that include a proviso saying any increase will have to be paid for by "efficiency gains".

The unions interpret this to mean cuts in jobs or some loss of working conditions. Now the National Tertiary Education Union has set down dates in early February for mass meetings of staff and warned that its support for Labor at the next election is in doubt.

The government faces the prospect of going to the polls, possibly on March 23, with universities in chaos and key unions opposing its re-election.

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The NTEU also announced it had rejected the government's proposal that unions agree to further "efficiency dividends or defined clawback of resources". The union said enterprise bargaining negotiations over the past year on individual campuses had involved a 2 per cent rise but that this has had to be paid for out of university budgets.

Changes to Commonwealth financing arrangements for universities had also yielded annual savings of up to 1 per cent since 1988, the union said.

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Responding to the hard line taken by federal cabinet, the union has demanded an initial upfront payment of 4 per cent, with a further 1.6 per cent to come later in 1996, and negotiations to take place over the remainder of the pay claim.

The government is clearly concerned at the Aus$240 million (Pounds 120 million) additional cost that a 5.6 per cent rise will incur and does not want any flow-on to other workers. But, in insisting that academics and general staff effectively pay for the salaries boost themselves by sacrificing jobs or conditions, the government has set itself on a collision course with a highly-vocal group of workers.

"Our union executive is highly alarmed by the government's position," NTEU general secretary Grahame McCulloch said. "We believe that education minister Simon Crean has argued a strong case in cabinet but cabinet's position is not one the union can live with. Our expectation is that there will have to be a change in that position and, if we do not reach agreement, we will develop a programme for industrial action."

Mr McCulloch said a number of the NTEU's divisions and campus branches were prepared to take industrial action in February in support of the pay claims.

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