Australia is in “deep trouble” if its universities are neglected by the federal government, the head of the peak body representing higher education says.

As a skills shortage grips Australia, Universities Australia chair John Dewar is urging the federal government to recognise their economic importance.

The “blunt truth” is that to get a good job in Australia’s major sectors such as IT, health and STEM (science, technology, engineering and mathematics), people need a university or vocational qualification, Professor Dewar told the National Press Club.

“If we neglect our universities, Australia is in trouble, deep trouble,” he said on Wednesday. 

“But if we support them strongly, our nation will survive, we will be more prosperous, more sustainable, more secure, healthier, more equal and more respected in the world.”

The time was right to reset the university sector, Prof Dewar said. 

“Australia urgently needs more graduates and more people quickly upskilling … universities and vocational institutions can help,” he said.  

The latest census data shows 43.5 per cent of people aged 25 to 34 have a bachelor’s degree or higher.

Among women in this age group, more than half have at least a bachelor’s degree, up from 26 per cent in 2001. 

“With so many Australians now having a life stake in our universities, time has come to renew them,” Prof Dewar said.

Prof Dewar welcomed the upcoming jobs summit initiated by the Albanese government and said universities would bring practical solutions for the skills deficit. 

But the government must also invest in research to benefit the economy, Prof Dewar said.

“If we could lift investment in higher education research and development by just one per cent we could lift productivity and increase the size of Australia’s economy by $28 billion over 10 years,” he said.

“The role of universities is particularly obvious in the regions, especially those with economies and communities in transition, in need of new skills and careers for their people.”