Australia Passes Universities Accord Bill, Reforms Funding System
Table of Content
Key highlights
- Australia’s Parliament has passed the Universities Accord (Opening the Doors of Opportunity) Bill 2026, which now awaits Royal Assent.
- The Australian Tertiary Education Commission (ATEC) will manage the allocation of government-subsidised student places under a planned growth model.
- Universities will receive extra funding for enrolling students from disadvantaged and regional backgrounds, under a needs-based funding model.
- Amendments secured by the Australian Greens restrict direct ministerial intervention in specific courses and establish system-wide allocation rules.
On 13th October 2026, Australia passed the Universities Accord (Opening the Doors of Opportunity) Bill 2026, after several consequential amendments to its original draft. The Senate agreed to the amendments made by the House of Representatives and the Bill was passed more than 15 weeks after its introduction. The Bill that changes how the federal government funds and distributes university places is now waiting for Royal Assent from the Governor-General.
Government Sets the Total, ATEC Divides It
The legislation amends the Higher Education Support Act (HESA) 2003, replacing the previous block-grant arrangement with a managed growth framework. Under the previous system, public universities received capped total funding pools and determined their own enrolment volumes within those limits. Enrolments above the funded threshold received no Commonwealth subsidy, though institutions retained student contribution fees.
The Bill replaces this with a planned system, under which the government will set the total number of Commonwealth-supported places. The Australian Tertiary Education Commission (ATEC), the new body created by separate legislation that passed in March 2026, will then allocate those places to universities.
Places for students belonging to disadvantaged backgrounds and from regional and remote areas are treated differently. ATEC can allocate extra places for these students when demand requires it, and the government says this effectively uncaps their places. The spots for Indigenous students remain driven by demand, which means funding follows every student who enrols.
Government projections estimate an additional 16,000 funded places annually over the next three years, rising to 19,000 extra places annually from 2030. It also forecasts about 230,000 additional students to start university over the decade, supported by A$3.6 billion in extra funding.
The Australian Universities Accord Final Report found that the old funding model was not producing enough growth in enrolments and that the growth that did happen was "unplanned, unmanaged and under-funded". The reform addresses the report's recommendations, which called for a funding system managed by ATEC, and for the requirement of needs-based funding.
Needs-Based Funding Follows Students and Campuses
The Bill also codifies the needs-based funding structure, which started on 1st January 2026. Universities will receive more money for enrolling students from low socioeconomic backgrounds, First Nations students and students at regional campuses.
The equity component covers First Nations students and undergraduate students from low socioeconomic backgrounds. The regional component covers students at campuses in regional, remote and other high-priority areas. The Bill sets the base equity amount at A$1,535 and base regional amount at A$1,398, with modifiers taking outer regional to A$2,796 and Darwin regional to A$4,195.
Greens Amendments Narrow Ministerial Power
The Bill authorises the Minister to set the total number of new international students that universities can enrol in a given year, and tasks the ATEC to allocate those places. The federal political party Australian Greens also changed the wording from "a course" to "courses". The change is meant to make clear that the Minister's power is to set the overall pool, not to limit individual courses or providers.
Any limit would come through a ministerial determination for a specified year, and students starting a vocational education course are not counted. ATEC must consult public universities and certain private universities, known as Table A and Table B providers, before allocating international places.
The Greens' amendments also:
- Remove the Minister's power to restrict Commonwealth-supported places in particular courses.
- Extend the 5% over-enrolment allowance to all universities, adding roughly 7,000 places to system capacity.
- Bring forward the deadline for determining the domestic allocation pool to 1st June.
- Mandate ATEC to publish a summary of the factors it considered when allocating domestic places.
Passage of the Bill Receives Mixed Reactions
The country’s Minister for Education, Jason Clare, welcomed the passage of this legislation and said that the reforms “open the doors for more young people from poor families, from regional Australia and from the bush”.
Greens Senator Mehreen Faruqi criticised the Government's approach to international students, saying, "Migration policy does not belong in an education bill." Coalition lawmakers opposed the amendment, with Senator Matt O'Sullivan saying the Bill's migration powers should not be eroded.
Universities Australia, a 38-member sectoral apex body, welcomed the Bill's passage, and its Chief Executive Luke Sheehy noted that achieving the Accord's long-term targets would require sustained financial commitment as student numbers expand.
What Happens Next
The new system takes effect from 1st January 2027, according to the Department of Education. Following that, the government will set the number of university places each year, and ATEC will share them through agreements known as mission-based compacts.
Universities that currently enrol more students than they are funded for will move across under transitional rules, and they will not have their funding reduced as long as they stay within a limit set by ATEC.