Australia¡¯s government will guarantee universities¡¯ teaching grants for another two years to provide funding certainty during a period of policy upheaval.

Education minister Jason Clare will today announce that the ³ÉÈËVRÊÓƵ Continuity Guarantee (HECG) ¨C a three-year ¡°funding floor¡± to help universities adapt to the 2021 Job-ready Graduates reforms ¨C will be extended until 2025, while the?Universities Accord?reform process ¡°rolls out¡±.

The HECG maintains universities¡¯ funding envelopes regardless of how many students they enrol. Administrators will be required to use any unexpended grants to boost support for students from under-represented groups.

The measure, one of five ¡°modest, sensible priority actions¡± recommended in an interim report from the accord panel, will help institutions weather the financial pain of?declining domestic enrolments?until a mid-decade demographic bulge is expected to increase the number of university entrants.

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Mr Clare has promised to implement all five of the panel¡¯s recommendations, including cancelling the ¡°fail rule¡±, which removes students¡¯ access to government subsidies if they do not successfully complete at least half of their modules, and?extending demand-driven funding arrangements?to indigenous students in the cities ¨C two measures widely advocated by representative groups.

As?previously announced, Canberra will also bankroll up to 34 new study hubs in rural and outer suburban areas. And it will lobby state and territory governments to embed ¡°more people with expertise in the business of universities¡± in institutional governing bodies.

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Councils and senates will be expected to focus on campus protection measures and ¡°making sure universities are good employers¡±, amid public concerns about ¡°student safety and staff underpayment¡±.

The five changes are the government¡¯s down-payment on a far more ambitious reform programme to tackle funding uncertainty and inequitable outcomes. The report identifies more than 70 ¡°policy ideas¡± under consideration by the panel for its final report in December. ?

¡°Bold, long-term change is required to fulfil the mission of higher education in Australia,¡± the report says. ¡°Change in the sector must be significant. Complacency cannot be tolerated.¡±

University administrators will find some of the panel¡¯s long-term proposals confronting, according to sources. Mr Clare is expected to discuss some of these substantive issues when he releases the report today at the National Press Club in Canberra.

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An extract of his speech, provided in advance, highlights the need to boost enrolments from the city fringes and rural areas. ¡°If we don¡¯t, we won¡¯t have the necessary skills and the economic firepower we need to make this country everything it can be in the years ahead,¡± the minister was expected to say.

The report predicts that 55 per cent of Australian workers could have degrees by mid-century, up from 36 per cent now. This would entail 1.8 million domestic students undertaking government-subsidised degrees, roughly double the present number. ¡°It gives you an idea of the skills challenge we face,¡± Mr Clare will say.

In comments provided ahead of the speech, Mr Clare said just 18 per cent of regional Australians in their late twenties had degrees ¨C well shy of the overall proportion of almost 50 per cent. In ¡°poor families¡±, just 15 per cent of young adults had higher education qualifications.

¡°This has to change [because of] changes happening in our economy right now. More and more jobs will require a university qualification in the future. We are going to need more people to get those qualifications,¡± Mr Clare will say.

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Accord panel chair Mary O¡¯Kane said higher education was the ¡°foundation¡± for a fairer society and a stronger economy. ¡°We look forward to receiving feedback on the interim report, and to continuing this important work,¡± she added.

john.ross@timeshighereducation.com