The Federal Opposition Leader has outlined his higher education policy agenda, highlighting growth in online courses and reducing red tape for overseas students as his top priorities.

During a speech in Canberra, the nation's universities got a glimpse of what life would be like under a Tony Abbott government.

As part of his priorities, Mr Abbott has set up a working group of six backbenchers to look at ways of delivering more courses via the internet.

He says online courses will make tertiary study more accessible, particularly to older and disabled people, or those who live in remote areas.

"The Coalition wants Australian universities to be able to take advantage of the growth in online learning such as the development of massive open online courses," he said.

"This is not about delivering courses cheaply, it's actually about teaching better.

"How, for instance, can online technology improve existing campus-based teaching?

"Can online courses offered by Australian universities be attractive to large numbers of students from around the world?

"Most importantly, what should governments do or undo to enable universities to make the most of the potential of online courses and the potential that new technologies create?"

Some of the country's most prestigious universities think the working group is a good idea.

Professor Fred Hilmer, from the Group of Eight, says institutions in the United States and the UK are expanding their online presence and Australia needs to compete.

"We've got to give this area a lot of attention, otherwise it will sneak up behind us and hit us over the head," he said.

"The opportunity is not to go from a university to online but to basically combine the best of both."

But Prime Minister Julia Gillard has ridiculed the Opposition's proposal.

She says Australian universities need the National Broadband Network (NBN) if they are to continue to expand online.

"Mr Abbott lecturing universities about teaching online when he wants to stop the rollout of broadband - I mean, run that by me again?" she said.

"It's like saying a child should be studying at a desk with a lamp but you're not going to roll out the electricity grid so that they can turn the lamp on."

University funding

During his speech, Mr Abbott said the Coalition would be unlikely to make drastic changes to the sector.

He did not flag funding cuts, but spoke of the tough fiscal environment.

"In a constrained budget environment, to avoid further cuts rather than actually to win higher funding is often the best outcome that particular sectors can hope for," he said.

Tertiary Education Minister Chris Bowen says that is code for slashing funding.

"Tony had an opportunity today to date, to make real and detailed commitments to the university sector about their funding, he failed to do so," he said.

"So I think universities would be right to be very concerned about their funding under an Abbott government."

The National Union of Students also says Mr Abbott needs to provide more details for student aid and course funding, adding the Coalition is being deliberately vague about its plans for higher education.

But the nation's universities want more money from both sides of politics.

Belinda Robinson from Universities Australia says an annual funding increase of 2.5 per cent over five years is needed.

"To bring us to a level that would put us mid-range around other developed nations - the OECD (Organisation for Economic Cooperation and Development) nations."

International education is Australia's fourth largest export and contributes $15 billion annually to the economy.

Michael Chaney, the chair of the Government's International Education Advisory Council, says the industry will suffer if not funded properly.

"The principle issue here is funding of universities and it's essential that universities continue to be funded adequately both for the sake of their domestic and international students," he said.

He says online education is important, but is largely a responsibility for individual universities.