Abstract
The main argument advanced in favour of the Hawke government's reform of higher education, as contained in the recent White Paper, relates to the imperatives of economic restructuring. A more ‘relevant’ and ‘responsive’ higher education system is, according to the government, the necessary basis of a more advanced and internationally competitive economy. We argue below, however, that the reforms are premised on a false assumption: that the private sector in Australia is capable of and/or interested in exploiting the expected boost in graduates and research for the purposes of developing new technologies and competitive advantages. Indeed, the government has found it necessary to intervene in a centralist manner to induce the appropriate response in the private sector. This is justified as market‐facilitating. In reality it is an act of faith which contradicts both the capacity and agenda of the private sector in Australia.