Nationals MP Michael McCormack said he and colleagues were "surprised and shocked" at the proposal and worried about the impact on regional universities. "The important thing is to ensure that we maximise access to universities": Tony Abbott. Credit:Sandra Hutchinson Mr Pyne had not put a specific timeframe on axing the fee, apart from telling the Australian Financial Review on Tuesday: "It might be in the budget, but that's not until May." Mr Pyne then sought to dampen expectations, telling ABC Radio on Wednesday the axing of the fee was not a priority. Mr Abbott said on Thursday the government had other, more important priorities. University leaders have accused the Coalition government of reviving an outdated ideological debate over student unionism and argued services would be diminished if the government scrapped the student services fee.

Compulsory student unionism, long opposed by the Liberals, was abolished by the Howard government in 2005 but the Gillard government passed legislation in 2011 to allow a new student services and amenities fee. The fee of up to $273 per student is collected by universities to subsidise services such as legal assistance, sporting facilities and childcare, as well as student advocacy. The issue has the potential to revive old divisions between the Coalition parties. Mr McCormack told ABC Radio his party's members were "surprised and shocked" at the proposal which he said was not well thought through. "I think perhaps it has to go to a backbench committee where we have regional Liberals, as well as National party members, who can argue the point on behalf of regional universities and regional students that the student services and amenities fee is an integral part of regional university campuses," he said.

Nationals frontbenchers Barnaby Joyce and Fiona Nash, who have previously been outspoken on the student fees issue, did not respond to Fairfax Media's questions on Wednesday. Mr Abbott made clear on Thursday the government was not rushing to make changes. "When the former government moved to re-impose compulsory student unionism we obviously opposed it," he told reporters in Melbourne. "I have to say that there's a lot on our plate. We are going to be a very busy and active government over the next few years and this is not a priority for us and we have no plans for change in this area at this time." Mr Abbott also defended Mr Pyne's decision to review the current demand-driven university system - whereby the federal government funds as many places as institutions can handle.

Labor has accused the Coalition of walking away from its pre-election comments that it had no plans to re-introduce caps on university places. Mr Abbott said Labor's higher education spokesman Kim Carr had made similar comments before the election about whether the uncapping of places had affected quality. But Mr Abbott emphasised the Coalition would not abandon the principle of expanded access to university. "We are looking at this issue," Mr Abbott said. "The important thing is to ensure that we maximise access to universities while at the same time maintaining and wherever possible improving their quality.

"That's why we're looking at this issue but what we aren't going to do is compromise the commitments we took to the people at the last election." The Coalition has long argued for a central focus on quality, but Mr Abbott told a Universities Australia conference in February the sector most needed "a period of relative policy stability" and played down suggestions of changes to the demand-driven system. Mr Pyne issued a media release in August 2012 headlined "Coalition will not cap places or raise HECS" and told ABC TV in July this year he had "no plans to restore the cap". Acting Labor leader Chris Bowen said on Wednesday regional universities and aspiring students from less wealthy families would be the big losers if the Coalition broke its promise. Mr Bowen said the review would provide an "alibi for cutting university funding".

Universities Australia chief executive Belinda Robinson said she was surprised by the minister's comments because the Coalition had made strong statements in support of keeping the demand-driven system. Australian Catholic University Greg Craven said he was "relaxed" about the review because he was confident it would show the current system was not affecting quality. Australian Scholarships Group chief executive John Veleginis said he did not agree with Mr Pyne that the student services and amenities fees was "compulsory student unionism by the back door". Loading He said the fee helped to provide social and emotional support for disadvantaged or lower socio-economic background students who may otherwise face significant barriers in pursuing post-secondary study.

with Josephine Tovey and Benjamin Preiss