Australian universities face a likely erosion of teaching grants, irrespective of the outcome of a looming federal election.

Education minister Dan Tehan, who opened the second day of the Universities Australia ÖйúAƬ conference in Canberra, gave a heartfelt speech about the importance of ÖйúAƬ to Australians living outside the major cities, but offered little in the way of?practical measures to boost regional provision.

Shadow education minister Tanya Plibersek, who followed Mr Tehan to the podium, restated earlier Labor Party promises including the uncapping of university places, an A$300 million (?161 million) ¡°future fund¡± for infrastructure, guaranteed three-year funding agreements and a postsecondary education review with an ¡°enormous brief¡±.

Ms Plibersek released the terms of reference for the review, which will make recommendations on 13 areas ¨C including ¡°an equitable, sustainable and transparent funding model¡± ¨C and repeated Labor¡¯s pledge to bankroll the restored demand-driven university funding system with A$10 billion in additional funding.

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However, details of how the system would work remain vague, with specifics to be informed by the review.

The government in effect ended the demand-driven system in late 2017 when it froze teaching grants at that year¡¯s level ¨C a move the sector interpreted as a cut, because there has been no indexation since then to compensate for inflation.

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Ms Plibersek told Times ÖйúAƬ that Labor intended to restore indexation for teaching grants, but that there would be no ¡°catch-up¡± funding to replace the lost indexation during 2018 and 2019.

This suggests that the real value of individual teaching subsidies will be lower than those the sector experienced under the uncapped funding regime from 2012 to 2017, should Labor win the election and implement its promises.

Southern Cross University vice-chancellor Adam Shoemaker said that it remained to be seen whether teaching grants would in effect be lower than previously under a newly elected Labor government. ¡°We have to wait and see,¡± he said. ¡°The next step is the inquiry. That¡¯s going to be massive.¡±

If the coalition government wins the election, it proposes to allocate the sector additional performance-based funding starting at around A$70 million a year ¨C an amount that commentators say will barely compensate for enrolment growth, let alone the lost indexation.

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Mr Tehan did not deliver an aggressive speech whose text had been circulated earlier to journalists. Instead, he spoke about his experiences when he first visited Canberra as a young graduate diplomat from rural Victoria.

¡°I would not have been there if it hadn¡¯t been for my education," he said. "If I hadn¡¯t had a master¡¯s degree, I would not have been [one of] those diplomats going off to represent our nation. [That has] always been part and parcel of the philosophy that I¡¯ve brought to the parliament.¡±

Mr Tehan said that people born in Ms Plibersek¡¯s inner Sydney electorate had a 45 per cent chance of obtaining a degree. The prospects dropped to 23 per cent for those born in his rural Victorian seat of Wannon. ¡°That¡¯s something all of us ¨C government and the sector ¨C need to continue to work on,¡± he said.

Vice-chancellors complimented the presentation, saying that Mr Tehan had managed to get his message across ¡°without getting nasty¡±. However, the speech contained no reference to the demand-driven system, which the government has repeatedly refused to reinstate.

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UA chair Margaret Gardner had earlier told the National Press Club that restoring demand-driven funding was the best way to improve regional ÖйúAƬ participation.

john.ross@timeshighereducation.com