In 1970, only three per cent of Australians held bachelor degrees. In 2012, almost 37 per cent of young Australians had degrees, and participation is growing strongly towards the national target of 40 per cent by 2025.

Increasing participation in higher education will continue to make a major contribution to national productivity by helping to meet labour market demand. There has been a marked shift in employment towards occupations generally requiring a degree across the OECD since the 1970s. The biggest employment growth in Australia in the past five years has been in occupations usually requiring a bachelor or higher degree. Between 2015 and 2025 Australia will add on average between 238,000 to 360,000 such jobs each year. The demand for higher skilled jobs is predicted to grow at around 1.6 times the rate of low-skilled jobs.

To meet this need, university education needs to be accessible to those elements of the population that have not traditionally participated. In particular, those with low socio-economic backgrounds, Indigenous people and those from rural or remote areas.

The demand-driven funding system, whereby universities are able to accept any student who meets entry criteria, is an important method through which participation will increase, particularly for students from the aforementioned equity groups.