Australia’s universities are warning they will be forced to make “difficult decisions” on campuses, courses and staffing levels without more funding.

Universities Australia, the peak representative body for Australia’s 41 universities, said more money was needed to address “historic underfunding” of the sector.

“We will see classes getting bigger, we will see difficult decisions being made around campuses, around courses, around staff permanency,” said Belinda Robinson, chief executive officer of Universities Australia.

“These are the sorts of things that will be affected if we don’t address the issue that there has been a historic underinvestment in universities.”

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Ms Robinson admitted Tuesday night’s Senate defeat of the Government’s higher education reform bill was “disappointing”.

If passed, the legislation would have allowed universities to set their own course fees.

But Ms Robinson said she hoped the bill’s defeat would be an opportunity for a new debate “that doesn’t see universities and research continue to be the political football”.

Labor, Greens join with crossbench senators to defeat bill

It was the second time the Coalition’s higher education changes had been rejected.

Labor and the Greens were joined by several crossbench senators to defeat the bill, 34 votes to 30.

John Madigan wanted to amend the bill. Photo: AAP

Independent senators Nick Xenophon, Jacqui Lambie and Glenn Lazarus, Ricky Muir from the Motoring Enthusiasts Party, and Palmer United Party senator Dio Wang opposed the Higher Education and Research Reform Bill.

Family First senator Bob Day supported the bill, along with Liberal Democrat David Leyonhjelm.

Independent senator John Madigan also voted in favour of the bill, but made it clear he wanted it to progress so that it could be amended.

“I have serious concerns with the bill in its current form, but I also fear the consequences of doing nothing,” he told the Senate.

Senator Xenophon said everyone agreed the system of university funding needed to change.

“I don’t, however, believe that deregulation is necessarily the best option in solving this problem,” he said.

“I cannot accept what the Federal Government is doing. I cannot support it.”

Education Minister Christopher Pyne vows to try a third time

Despite their opposition, the Education Minister Christopher Pyne has vowed to try a third time.

“Few dispute that without reform, Australia’s higher education system will steadily decline,” Mr Pyne warned.

Education Minister Christopher Pyne says he will make another attempt to pass university reforms.

He vowed to continue to work with “senators and others who want to have a constructive discussion”.

“We will therefore bring back the higher education reform package for the Parliament to consider,” he said.

“We will not give up. This reform is too important.”

Mr Pyne accused Labor of blocking the bill for political purposes, attacking the Opposition for offering “no viable alternative”.

Opposition education spokesman Kim Carr said Labor opposed fee-deregulation because it was unfair.

“Universities have fundamentally misjudged the mood of the Australian people, the mood of the Australian Parliament,” Senator Carr said.

“These proposals are fundamentally unfair, and unnecessary.

“What we have to do is ensure that there’s real sharp contrast put to the Australian people.”

Senator Carr said Labor would put forward an alternative funding model ahead of the next election.

– ABC