The challenge
The Australian electorate, by and large, backs Australian made when it comes to manufacturing and innovation. But modern social and cultural challenges don’t receive the same profile.
As a sovereign nation, with a complex history and multicultural population, we must invest in understanding how people, cultures and institutions interact in Australia’s specific context – in light of our own opportunities and on our own terms. We need to think critically, test assumptions, and prepare our future citizens and workforce for a world in which neither democratic institutions nor social cohesion can be taken for granted.
Australia is at a point of momentous change navigating the impact of AI and digital transformation, climate crisis, increasing international tensions and national security concerns, a loss of faith in science, and a decline in trust in liberal democratic institutions.
To tackle these challenges, we need new Australian thinking and leadership, and the humanities are core to building and sustaining these capabilities. Yet humanities education, research, innovation and practice is under threat. Decades of cuts to humanities and creative arts programs, enrolments, research support and staffing are eroding our national capabilities. Australia is losing vital expertise and students have less choice than previous generations.
In 2026, the Government should take four immediate, tangible steps to arrest the decline in Australia’s cultural capability and lay the foundations for an agenda to Back Australian Thinking.
- Replace the Jobs Ready Graduates (JRG) Package – potentially cost neutral.
- Create a national strategy to grow Australia’s Asia literacy/capability – to be costed at completion of the Parliamentary Inquiry into building Asia capability in Australia through the education system and beyond.
- Build sovereign, inclusive and responsible AI – estimated, $415 million over five years.
- Resource Australian Tertiary Education Commission (ATEC) to monitor sovereign capabilities in universities – estimated, $20 million over four years.
1. Replace the Jobs Ready Graduates Package
The Jobs Ready Graduates (JRG) package is undermining Australia’s national interest by distorting student choice, weakening workforce capability, and entrenching inequity across the higher education system.
The JRG has failed against its stated objectives. Australia now has fewer nurses and teachers than when JRG was introduced, while students undertaking degrees that underpin the nation’s services economy are carrying disproportionate — in many cases doubled — levels of student debt, at a time of acute cost-of-living pressure.
The JRG hurts students. It increased student contributions in history, philosophy, communications, journalism, media, curatorship, politics, and sociology by 117% (from $6,684 to $14,500 in 2021, now $16,992). The cost of some humanities degrees has blown out to $50,000 (source IRU).
From a Budget perspective, the JRG Package is economically inefficient
By discouraging enrolments in sectors of employment where skills will not be made redundant by AI and other forms of automation, the JRG is constraining the future workforce required for productivity growth, public service delivery, and economic diversification. The longer the package remains in place, the greater the long-term cost to Australia’s sovereign capability and labour market resilience.
There are credible, cost-neutral alternatives to the JRG.
- 2024 modelling by Higgins and Khemka, endorsed by HECS architect Professor Bruce Chapman, demonstrates that student contribution settings can be rebalanced without increasing overall Commonwealth expenditure.
Read more:
- JRG undermining positive reforms to student support
- Academy submission to the Job-ready Graduates Exposure Draft Legislation
- Why we need to Back Australian Thinking
2. Invest in Australia’s Asia literacy & capability
Deep, sustained understanding of Asia is essential to Australia’s prosperity, security and international standing. The Academy’s Australia’s China Knowledge Capability Report (2023) shows sharp declines in domestic student enrolments, research funding and institutional capacity. Rebuilding Asia capability is a matter of national interest.
In our submission to the Parliamentary Inquiry into Building Asia Capability we called for urgent, coordinated national action to reverse a decades-long decline in Asia-focused education, research and expertise.
The Parliamentary Inquiry is a welcome first step in addressing Australia’s long-term decline in Asia literacy, which has been evident since the 1990s.
Future government investment in Asia Capability must provide for:
- Commissioning a bipartisan National Asia Capability Strategy and a new mechanism to coordinate and grow capabilities across Australia.
- Resourcing the new Australian Tertiary Education Commission (ATEC) to monitor Asia capability and to convene an annual national forum.
- Extending the New Colombo Plan to support advanced and postgraduate study in Asia.
- Resourcing a cross-portfolio taskforce to embed Asia literacy and capability into the Jobs and Skills Australia National Skills Taxonomy, ensuring these competencies are recognised and prioritised across education and workforce systems.
Read more:
3. Build sovereign, inclusive & responsible AI capability
Australia’s capability to develop innovative AI systems, understand and address their limitations, and evaluate their impacts in real-world contexts is fragmented and not at optimal scale to meet the challenge.
Australia’s National AI Plan sets a strategic direction to grow a competitive, productive and resilient AI-enabled economy. Achieving these goals will depend not only on our technical skills but also on mobilising Australia’s intellectual, cultural and social expertise to design, deploy, evaluate and govern AI in ways that are trustworthy, inclusive and aligned with Australian values and contexts. Humanities and social science research, and workforce development as well as multidisciplinary collaboration are essential to ensure AI systems deliver public benefit, manage risks, and reflect the nation’s diverse communities.
To meet this challenge, the Budget should establish:
- An AI Sovereignty Fund – estimated $120 million over 4 years
- Stronger, durable linkages between government, industry and university research are essential for sovereign, inclusive and responsible AI capability.
- National AI Skills & Workforce Initiative – estimated $85 million over 3 years
- AI capability requires not only engineers and data scientists but also a broader range of professionals all equipped to address social, cultural and ethical dimensions of AI in the economy and public life.
- National AI Research Translation Hubs – estimated $150 million over 5 years
- Translational capacity and durable partnerships are critical to move research out of silos into real-world deployment and regulatory frameworks.
- First Nations AI Capability & Inclusion Program – estimated $60 million over 4 years
- Ensuring AI strengthens rather than undermines First Nations self-determination and digital inclusion aligns with Closing the Gap priorities and strengthens national AI capability.
Read more:
- Why the humanities are essential to artificial intelligence
- Backing Australian thinking: Building sovereign, inclusive & responsible AI capability
4. Resource ATEC to monitor sovereign capability in universities
Australia lacks an independent steward to take a national, long-term view of tertiary education, leaving governments without the evidence or authority to ensure the system is building the capabilities Australia needs for future productivity, security, social cohesion and democratic resilience.
The government should fund ATEC to undertake regular, discipline-level monitoring of Australia’s sovereign capability across the tertiary education system, drawing on expertise from Australia’s Learned Academies.
This investment would fill a critical evidence gap not addressed by existing datasets or institutional reporting and is essential for proactive national planning rather than reactive crisis management.
The Budget should fund ATEC capacity to monitor sovereign disciplinary capabilities — estimated $20 million over four years.
Fund ATEC to undertake regular, discipline-level monitoring of Australia’s sovereign capability across the tertiary education system, drawing on expertise from Australia’s Learned Academies. Funding is required to support:
- Formal partnerships with the Learned Academies and other stakeholders to provide discipline-deep intelligence across HASS, STEM and health.
- Annual national capability assessments covering teaching capacity, research strength, workforce pipelines and emerging fields.
- Identification of capability at risk, including languages, Asian literacy, civic and democratic understanding, and critical professional skills.
- Public reporting to Parliament to support transparency and long-term planning.
This function fills a critical evidence gap not addressed by existing datasets or institutional reporting and is essential for proactive national planning rather than reactive crisis management.
Read more:
- Academy urges strong, independent ATEC to steer Australia’s tertiary education system.
- Strategy, capabilities & collaboration: the future of tertiary education.
