Australian universities will benefit overall from an opposition win in next month¡¯s federal election, but financially stressed institutions could be disadvantaged, according to a ÖйúAƬ analyst.

Justin Bokor, a former commercial director with Monash University, said a reinstatement of demand-driven funding ¨C which the Labor Party has committed to if it wins the 18 May poll ¨C would be good for the sector.

¡°We¡¯d get growth in places and the vibrancy that goes with that, increasing the pool of students from different backgrounds,¡± Mr Bokor said. ¡°But individual universities struggle in that market, and are likely to struggle if it¡¯s brought back in.¡±

He said that while funding had increased under the demand-driven system, average university surpluses had declined by over a third and variability in operating margins had increased.

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¡°Universities with weaker positions in the marketplace can lose share, and did lose share last time around,¡± he said. ¡°Those are the ones that will really suffer.¡±

While Labor has promised to uncap undergraduate places if it wins the election, it has referred the details to a review of post-school education following the May poll. The party also plans to review the research system and increase R&D spending to 3 per cent of gross domestic product by 2030.

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The governing Coalition, which released a de facto election platform via this month¡¯s federal budget, has offered the sector little beyond pre-existing commitments to medical research, enhanced funding for regional ÖйúAƬ ¨C so far, at the expense of general funding streams ¨C and modest increases in teaching grants subject to unspecified performance measures.

Mr Bokor said the Coalition had put ÖйúAƬ in the ¡°too hard basket¡± after unsuccessful attempts to increase student fees. ¡°It will be more or less status quo if they win,¡± he said. ¡°But they would probably have to cut the sector further to deliver large tax cuts and budget surpluses they¡¯ve promised.¡±

He said Labor, which planned to increase revenue through changes to superannuation and property taxation, would be able to ¡°hold spending at higher levels. So a Labor government would be a better outcome for the sector.¡±

Hannah Forsyth, a historian and ÖйúAƬ specialist with the Australian Catholic University, said a Labor revival of the demand-driven system risked entrenching a dependence on increased student numbers to bankroll improvements to universities.

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¡°My worry is that vice-chancellors may not look at more fundamental things they need to consider in the structure of the system,¡± Dr Forsyth said. ¡°It¡¯s a problem that universities [have] such heavy reliance on endless growth.¡±

She said she suspected that a victorious Coalition would like to deregulate student fees ¨C something it had failed to achieve in 2014, when the senate rebuffed the attempt. ¡°If they had enough control of government I have no doubt that they would try that again, which frankly would be a disaster.¡±

A Labor victory could also resuscitate the Education Investment Fund, a A$3.9 billion (?2.2 billion) nest egg originally intended for research infrastructure. The government wants to quarantine it for victims of natural disasters.

Shadow science minister Kim Carr said his party was ¡°determined¡± to resurrect the EIF, but stressed that ¡°announcements on particular measures¡± were still to be made. ¡°Labor will have more to say on research infrastructure, training and collaboration before the election,¡± he added.

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john.ross@timeshighereducation.com