Police have used capsicum spray on protesters outside a Liberal Party dinner to mark the 20th anniversary of the election of John Howard's government.

However, Prime Minister Malcolm Turnbull is suspected to have avoided the skirmish in Melbourne's Docklands by arriving by boat and entering the back of Shed 14 behind a police line.

About 150 people gathered outside the Central Pier function venue about 6pm on Friday to protest the federal government's changes to higher education and the treatment of asylum seekers.

Students, unionists and refugee activists held placards and chanted slogans such as "No ifs, no buts, no education cuts."