Christopher Pyne. Credit:Andrew Meares Labor's higher education spokesman, Kim Carr, said he agreed the nation's higher education sector needed to strive for excellence but the review was a ''clear broken promise''. ''It's an ideologically driven exercise in trying to reshape the university system to their liking,'' Senator Carr said. ''This is a return to their old political positions which I might say they weren't gracious enough to mention during the election.'' Labor removed caps on the number of Commonwealth-supported university places, helping an extra 190,000 students to access higher education. This move to a ''demand-driven system'' sparked concerns from some quarters about quality suffering and the rising cost to taxpayers.

The Coalition has long argued for an emphasis on quality as a key priority in the higher education sector, but played down speculation it may end the demand-driven system. In a media release headlined ''Coalition will not cap places or raise HECS'' on August 26 last year, Mr Pyne said he welcomed debate over quality and standards in universities, but had ''no plans to increase fees or cap places''. And in an interview on ABC's 7.30 program on July 17 this year, Mr Pyne said the Coalition had ''no plans to restore the cap'' and believed the more students attending university, the better. Prime Minister Tony Abbott, when opposition leader, told a Universities Australia conference in February: ''A period of relative policy stability in which changes already made can be digested and adjusted to, such as the move to demand-driven funding, is probably what our universities most need now.'' Mr Bowen said the review would provide an excuse to cut university funding.

''If you abolish the demand-driven system you are cutting university funding,'' he told reporters on Wednesday. ''That clearly wasn't in their savings pre-election, and in fact we were told time and time again that education wouldn't be cut. Guess what? Universities are education and abolishing the demand-driven system is a massive cut to university funding.'' Mr Pyne told ABC Radio on Wednesday he had not decided to bring back caps and accused Labor rival Mark Butler of living in "complete la la land" for arguing against a review. ''You must be living in a bubble ... if you think that there is not an issue in universities about whether there are quality issues about the extraordinary number of students being enrolled,'' Mr Pyne said. During the radio debate, Mr Butler had accused Mr Pyne of ''cloaking a broken promise and an intention to impose cuts on universities with language about quality''.

Education consultant Andrew Trnacek, from advisory firm Grant Thornton, said a review of the demand-driven model made financial sense. ''It was the introduction of an uncapped demand driven model into the Victorian TAFE system that saw budgets balloon by $400 million,'' he said. ''The problem with such funding mechanisms is that the government loses the ability to manage demand and therefore costs.'' A recent Grattan Institute report said expenditure on the demand-driven system was expected to increase by nearly 45 per cent over eight years, costing more than $11 billion a year by 2017. Mr Pyne identified the review of the demand-driven system as one of his top three priorities for the higher education portfolio, alongside a desire to revive Australia's international education market and cut tertiary sector red tape.

He said the review was simply about investigating whether the system was affecting quality as some had claimed. Mr Pyne also confirmed the government would axe the compulsory fee collected by universities to support student services and scrap Labor's targets to lift participation by disadvantaged students. He said the student services and amenities fee introduced by Labor was ''compulsory student unionism by the back door'' and the Coalition would abolish it - in line with its past opposition to the levy. Mr Pyne said the government would axe Labor's specific targets to increase participation by those from low socio-economic backgrounds to 20 per cent by 2020, and to have 40 per cent of 25 to 34-year-olds holding a bachelor degree or higher by 2025. Although he wanted to increase participation, Mr Pyne said he believed in outcomes rather than ''targets for targets' sake''.

Senator Carr likened the targets to affirmative action, saying such goals were important ways to change behaviour. The axing of the targets would ''entrench inequality'' and reinforce ''the great social divides in Australia''. Senator Carr said the amenities fee was extremely important for students' university experience and provided up to $300 million in economic activity. Labor was unlikely to vote to support the axing of the fee. Labor and the Greens maintain their control of the Senate until June next year. Greens higher education spokeswoman Lee Rhiannon said it was time for Mr Pyne and his colleagues to ''get over their ideological obsession that student organisations are hot beds of dissent''. The Abbott government will put forward legislation to implement more than $2 billion in savings to higher education and student support originally announced by Labor in the May budget.