Australia needs a bigger skilled workforce to navigate the enormous economic changes ahead, but the 2026 Intergenerational Report shows the support needed to deliver it is heading in the opposite direction.
For universities, three numbers in the IGR stand out:
• University attainment falls short of the Australian Universities Accord’s ambition – degree attainment is projected to rise from 40 per cent to 47 per cent by 2065-66, while the Accord called for 55 per cent of young Australians to hold a degree by 2050.
• Higher education funding shrinks as a share of the economy – Commonwealth spending on higher education and VET is projected to fall by 0.2 percentage points of GDP.
• Income support falls too – income support and assistance to students is projected to fall from 3.4 per cent to 2.6 per cent of GDP without policy change.
Universities Australia Chief Executive Officer Luke Sheehy said the report showed Australia would need more skills as AI, an ageing population, the energy transition and other major changes reshape the economy.
“The IGR makes the challenge pretty clear – Australia is going to need a lot more skilled people,” Mr Sheehy said.
“Universities will be central to that. We educate the nurses, teachers, engineers, researchers and technology workers Australia needs, and help create the ideas and industries of the future.
“That’s why we’ve called for the Government to adopt the Accord’s 55 per cent university attainment target.
“Workforce projections show the bulk of future jobs growth will be in roles requiring a university qualification. If we don’t lift attainment, we simply won’t have the skills Australia needs.
“That makes the 55 per cent target a workforce necessity, not just an education ambition. And if we’re serious about meeting it, we have to open the door to university much wider.”
UA has also called for more support to help students afford to study, including concession cards for all domestic university students, and for the failed Job-ready Graduates scheme to be replaced.
“Opening the door is only half the job,” Mr Sheehy said.
“Students have to be able to afford to walk through it, stay there and graduate. And universities need to be properly funded to educate and support many more Australians.
“We know a lot of the extra graduates Australia needs will have to come from people who have historically missed out on university.
“Those students will need more support to get in, stay in and graduate – and universities need the funding to help them succeed.
“The IGR is a reminder of what’s coming. If Australia wants the skills, research and ideas to navigate an ageing population, AI and a changing economy, we have to back the students and universities that will deliver them.”
