Between 1997 and 2004 the immediate throughput of students from the final year of school to the next year in first year higher education dropped from 40 to 31 per cent.

The outcome of successive fiscal decisions under Howard was a sharp deterioration in the public funding level and in the teaching and research capacities of Australian higher education relative to most OECD nations and to the emerging Asian research and development (R&D) economies of China, Taiwan and Singapore. In the 1970s and 1980s Australia funded tertiary education at above the average OECD level of public investment as a proportion of GDP. In 2004 Australia spent 0.8 per cent of GDP in public investment in tertiary education compared to an OECD (and USA) average of 1.0 per cent. On this measure, Australia was 25th of the 29 OECD countries for which data are available.