The Turnbull government is challenging the "prophets of doom" in universities as it ramps up its arguments for higher education cuts.
Education Minister Simon Birmingham will bluntly make his case to university leaders in a speech on Wednesday, insisting he's been honest all along about the need to find savings in the sector.
He's facing a fight to get a university package - including a two-year 2.5 per cent "efficiency dividend" on teaching funding, an increase to student fees, lowering the repayment threshold for student loans and quarantining some funding subject to institution performance - through parliament before year's end.
Crucial crossbench senators, including the Nick Xenophon Team, are yet to indicate where they stand.
University bosses have opposed the package across the board despite it being less harsh than the full-fee deregulation and 20 per cent funding cut proposed by Senator Birmingham's predecessor.
"I appreciate that nobody likes receiving less funding, even if it is only a slightly slower rate of growth than would otherwise have been the case," Senator Birmingham will tell them at a higher education conference in Sydney.
"However, the sector is kidding itself if it thinks the pressure to address the contribution escalating higher education spending made to the budget deficit will just go away."
He will note the original plan would have cut $3.5 billion from the sector and he has managed to reduce the impact by $700 million.
The minister will also point out the previous Labor government, which uncapped the number of students universities could enrol, proposed cuts of about $6 billion including an efficiency dividend.
He will tell university leaders he is confident they can manage the proposed cut in taxpayer funding.
The minister wants universities to imagine what a return to the pre-HECS era would be like - with taxpayers shelling out more, but universities receiving lower per-student funding than now.
"My challenge to those prophets of doom is to answer this question: what world would you prefer?" he will say.
Senator Birmingham will also move to assuage the fears of some about the performance measures that will be set up, saying they won't be one-size-fits-all.
"We cannot, and indeed should not, compare outcomes from a metropolitan university enrolling high school leavers in the top 10 per cent of their cohort against those of a regional university focused on first-in-family and mature age students," he will say.
