UNIVERSITIES say they will suffer "severe" financial strain after the federal government announced it would strip $2.3 billion from the tertiary education sector.
The Gillard government announced on Saturday more than $2 billion worth of savings, which include scrapping discounts to students who pay university fees upfront and the imposition of an efficiency dividend on universities.
The government says the measures will free up funds to pay for its "once in a generation" Gonski school reforms.
But Universities Australia, the peak body representing the sector, said the funding cut was the largest since 1996.
"We acknowledge the government is confronting difficult economic circumstances but we are concerned at the long-term impact these cuts will have on university research and education," Universities Australia chair Glyn Davis said in a statement.
"The application of this efficiency dividend, while limited to two years, will nonetheless place severe strain on a sector that has been encouraged to expand enrolments to enable greater access to higher education."
Professor Davis said the magnitude of the cuts made to the sector over the past six months would challenge the ability of universities to continue to meet the high standards of educational quality expected of them.
It also comes at a time when Australia sits a "disturbingly" 25th out of 29 advanced economies for public investment in universities as a percentage of GDP.
"Today's announcement will be condemned by those who understand that Australia's university sector is crucial to national productivity growth, industrial diversification and long-term economic transformation," Prof Davis said.
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