Jackson (2003) notes that although constitutional responsibilities were unchanged at this time:

“ … the Commonwealth's assumption of funding responsibility gave it a dominant position in the development of higher education policy. Through the conditions it attached to university grants it was able to determine the nature and characteristics of the system most notably with the establishment of the Unified National System (UNS) and the introduction of the Higher Education Contribution Scheme (HECS) in 1989.”

Indeed, this era brought the greatest structural changes yet in the history of Australian higher education.

1986 Review of Efficiency and Effectiveness

Increased higher education participation raised questions about the efficiency and effectiveness of higher education management. This culminated in the 1986 Review of Efficiency and Effectiveness in Higher Education (Meek, 1995). The Commonwealth Tertiary Education Commission (CTEC) Report gave particular emphasis to the improvement of university management and accountability through strategic planning (CTEC, 1986).

The 1987 Green Paper

The Hawke Government's policy discussion paper, the 'Green Paper', promoted the efficiency and capacity advantages of larger institutions, and focused on strengthening management at the institutional level. This paper proposed the abolition of the binary system and the establishment of a 'Unified National System' of universities.

The 1988 White Paper

The Government further pursued the management of higher education debate in Higher Education: A policy statement (the White Paper) (Dawkins, 1988). This resulted in:

the abolition of 'the binary system' – known as the ‘Dawkins revolution’ (named for the Labor Education Minister from 1987-1991);
a number of new universities being formed by amalgamation of Colleges of Advanced Education (CAEs) and Institutes of Technology (these are often referred to collectively as ‘the Dawkins universities’; and.
many existing universities also being expanded by absorbing colleges and adding their campuses.

Abolition of an arms-length commission for funding

Under Dawkins, higher education funding decisions shifted closer to government. Dawkins established the National Board on Employment Education and Training (NBEET) as a consultative/advisory body (only). This was a highly political act that abolished the partly independent Tertiary Education Commission, and placed Dawkins and the Department more firmly in control of funding. Jackson (2003) writes: “Since the Commonwealth assumed responsibility for funding higher education in 1974, responsibility for the allocation and administration of grants gradually shifted from statutory commissions representing the sector to the Minister and the Department.” NBEET was abolished by the Howard government in 2000, with the Ministerial Council on Employment, Education, Training and Youth Affairs (MCEETYA) taking on the role of the preferred consulting mechanism for the Howard government.

Higher Education Contribution Scheme (HECS)

In 1989 student tuition fees were reintroduced, albeit in the form of income-contingent loans to be repaid through the tax system on the student’s attainment of a particular income level, the Higher Education Contribution Scheme (HECS). HECS has evolved somewhat, with students in many disciplines now paying a far higher percentage of the cost of tuition than originally envisaged, and with a significantly lower real income threshold for repayment, however it is still in operation today.