“We congratulate the government on announcing reforms that will ensure higher education will be made available to all Australians, and that cost is no barrier to participation,” Business Council chief executive Jennifer Westacott said today.

“This is the kind of careful redesign of government programs that we have been calling for, with the aim of better outcomes and more effective use of taxpayer funds.

“Minister Birmingham’s announcement shows how governments can deliver structural budget reform by containing spending growth while delivering better services, allowing people time to adjust, and targeting taxpayer support at those who most need it.

“The reforms enshrine income-contingent loans and the demand-driven system – the two pillars that ensure higher education is accessible to all Australians.

“The opening-up of higher education has led to significant growth in the cost to taxpayers, many of whom haven’t had the benefit of a tertiary qualification. University graduates overwhelmingly earn higher salaries over their working lives, so it’s not unreasonable for them to contribute to the cost of their education.

“We must face up to the rising public cost of higher education. The alternative – to once again effectively restrict access to higher education to society’s elite few – is something that nobody should want.

“While we support the overall package, aspects of this plan will further entrench higher education as a silo, distinct from the equally important vocational education and training (VET) sector.

“The expansion of the demand-driven system to diploma, advanced diploma and associate degrees at public universities stands in stark contrast to the VET sector, where student loans have been capped for diplomas and advanced diplomas.

“At a time when the economy needs a wide range of skilled workers, vocational education and training should no longer be treated like the ‘poor cousin’ of the universities.

“Australia must break down the stigma that a university degree is somehow more valuable than a vocational qualification.”