Tehan’s comments, made at the Australian Financial Review Higher Education Summit in Brisbane, see the government moving to rectify frustrations between both sides caused by university research funding freezes and the capping of domestic university places over the past two years.

“We must change our relationship,” Tehan said.

“Guess why all Australian universities are charging down [the international education] path?”

“For too long, the higher education sector and the government have stood apart and lectured each other about the future direction of higher education policy.”

During that period, the relationship between both the government and university sector has become acrimonious, with Tehan’s predecessor Simon Birmingham saying universities should be “embarrassed” if they were unable to find 1.5% in budget efficiencies.

“These debates have typically proceeded from false assumptions on both sides – on the one hand, that the role of government was simply to hand over taxpayer funds and not invest in a partnership as to how those funds are used,” Tehan said.

“Helping young Australians to succeed in gaining employment will also grow Australia’s productivity and the economy overall. The higher education sector is vital to these ambitions.”

These funding gaps have put further pressures on universities to recruit international students to supplement revenue according to a 2018 Nous report, and Group of Eight chief executive Vicki Thomson said her members were seeking support through other means, including overseas students.

“Government funding of Go8 universities has fallen over time to an all-time low of an average of 35%. That leaves us to find almost two-thirds of our funding ourselves,” she said in her response address.

“The future of Go8 research put crudely, does come down to funds. The Go8 is always frank that we do rely on funds not tied to research ($3.3 billion in 2016), largely from fees of those international students, to support Australia’s research discoveries.”

Tehan’s speech came in the lead up to broader policy announcements, including a new performance-based funding scheme which will see an additional $80 million provider to universities.

Universities Australia chief executive Catriona Jackson said while the government’s desire to use universities to drive Australian productivity, the current level of teaching funding would mean many domestic students would still miss out on higher education.

“Current policy settings simply mean we will not have enough places for those budding students, and with performance-based funding, we are still going backwards in funding terms,” she said.

Australia is expected to have an explosion in its university-aged population, due to a Howard-era policy in the early 2000s to increase Australia’s birth rate, and funding shortfalls could impact the desirability of Australian as a study destination.

“Australia’s world-class higher education system is… a drawcard for international students and researchers,” Jackson continued.

However, during a period in which international education has continued to make headlines within Australia, University of Queensland chancellor Peter Varghese said Australia’s success could also be a double-edged sword.

“If you take that and link that to international students, you have got a series of interconnections there that are quite often complicated for universities,” he said.

Varghese added that while revenue through philanthropy, commercialisation, and industry partnerships is improving and showed promise, it is not likely to replace $7.5 billion contributed by international students.

“You don’t want an international student strategy that is so successful that you get push back from domestic students”

“The only alternative source that’s delivering a large amount of revenue is international students, and guess why all Australian universities are charging down that path?” he said.

In comments that echoed those of Australian National University vice-chancellor Briand Schmidt, Varghese said universities needed to consider what the right proportion of international students was at on campus.

“What is the right proportion of international students on our campuses, before we fundamentally change the character of Australian universities?” he asked.

“At the end of the day, you’ve got to remember, we are Australian public institutions, and we have a primary obligation to Australian students, and you don’t want an international student strategy that is so successful that you get push back from domestic students.”

During the conference, Tehan also announced plans for a new university foreign influence taskforce.