Australia’s government has undertaken to lock in the value of universities’ teaching grants under one of several “key amendments” negotiated in the governing Liberal-National coalition’s party room.

Education minister Dan Tehan will also pare back proposed tuition fee rises in several disciplines to allay concerns that the plans would have disproportionately harmed regional communities.

Mr Tehan said the government would establish a “floor” for the maximum basic grant amount (MBGA) for higher education courses, guaranteeing university funding in legislation. The mechanism will be included in a bill underpinning Mr Tehan’s “Job-ready Graduates” reform package, which is expected to be presented to Parliament on 26 August.

The draft legislation was unveiled a fortnight ago, with universities and other stakeholders given six days to comment. “We have made sensible amendments after listening to the constructive feedback,” Mr Tehan said.

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The lack of a funding guarantee was one of the main concerns raised during the consultation. Under current legislation, universities cannot be awarded a lower MBGA – the funding envelope they receive for teaching domestic bachelor’s students – than they were allocated in previous years.

This safeguard continued to apply even after the government froze teaching grants in late 2017. But it did not feature in the original draft of the new legislation.

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Its removal would have given bureaucrats a free hand in recalibrating each university’s funding envelope to take account of lower subsidy rates proposed in areas such as law, economics, management, political science and communications.

But university groups said this gave education ministers too much discretion to cut funding in the future. “The draft legislation as framed leaves the sector ever more vulnerable to the nation’s worsening economy,” the Group of Eight protested.

“Discretionary funding…[is] too often seen as a way to ‘trim’ higher education expenditure,” it said, adding that the pandemic had scuppered universities’ ability to compensate for funding shortfalls by enrolling more international students. “A cut can no longer be salvaged from overseas-sourced revenue.”

The Innovative Research Universities group, which had also raised concerns about the lack of a safeguard, said the funding floor was important. Executive director Conor King said it would help to ensure that government policy to increase university places was not derailed “once we move beyond this minister and this moment”.

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The government has also pulled back from its plan to more than double fees for psychology and social work to A$14,500 (£7,930) a year, instead setting them at A$7,950. To compensate, subsidies for courses in these areas will be increased and proposed fees for a swathe of other courses will rise by A$250.

These changes address concerns that the original plans would have denuded regional areas of psychologists and social workers at a time when people in the bush were suffering from the combined impacts of drought, bushfires and Covid-19.

The government will also convert a proposed A$5,000 “tertiary access payment” – originally intended to go directly to students – to a scholarship awarded by regional universities, to allay fears that the handout would have shepherded too many rural students into city institutions.

The Regional Universities Network said the changes had addressed its main concerns, and Parliament should pass the legislation without delay. Nevertheless, the bill is expected to be referred to a Senate committee for a month-long inquiry.

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john.ross@timeshighereducation.com