Higher Education Support Amendment (End Dirty University Partnerships) Bill 2025: Faruqi's Proposal to Make Universities Divest from Prohibited Entities

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Higher Education Support Amendment (End Dirty University Partnerships) Bill 2025: Faruqi's Proposal to Make Universities Divest from Prohibited Entities

The Higher Education Support Amendment (End Dirty University Partnerships) Bill 2025, introduced by Greens Senator Mehreen Faruqi on 13 February 2025, is a private senator's bill that would amend the Higher Education Support Act 2003 to impose new obligations on Australian universities receiving Commonwealth funding. The bill would require higher education providers to disclose all existing partnerships with, or investments in, 'defined prohibited entities' and to divest from those partnerships and investments within a six-month period. It would also prohibit universities from appointing to their governing bodies any individual who holds investments in a prohibited entity or serves on the board of a prohibited entity. The bill was originally introduced in the 47th Parliament, lapsed at the dissolution of that Parliament in July 2025, and was restored to the Senate Notice Paper on 23 July 2025 in the 48th Parliament. A second reading was moved on 6 November 2025 and debated the same day, but the bill has not been voted upon. The definition of 'prohibited entities' — which is critical to the bill's scope — would be set out in the bill text and would likely encompass entities involved in fossil fuel extraction, weapons manufacturing, and other industries that the bill's proponents consider to be inconsistent with the public purpose of universities. The bill represents one strand of a broader campus activism movement that has, over the past decade, called for universities to sever financial and research ties with certain industries on ethical grounds.

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Evidence review

What the Bill Proposes — Three Core Obligations

The End Dirty University Partnerships Bill proposes three distinct obligations for Australian higher education providers that receive Commonwealth funding under the Higher Education Support Act 2003. These obligations would apply to all Table A and Table B providers — essentially all public universities — as a condition of their continued receipt of Commonwealth grants and student contribution funding.

The first obligation is a mandatory disclosure requirement. Universities would be required to publicly disclose all existing partnerships with, and investments in, 'prohibited entities' as defined by the bill. This disclosure obligation would create a transparency framework that does not currently exist in any systematic form. While some universities voluntarily disclose investment portfolios and research partnerships, there is no standardised, legally mandated disclosure across the sector.

The second obligation is the divestment requirement. Universities would have six months from the commencement of the legislation to terminate partnerships with and divest from investments in prohibited entities. This is the core operative provision of the bill and the one with the most significant financial and operational implications for universities. The six-month timeframe is notably short, particularly for universities with complex financial portfolios, long-term research agreements, or endowed chairs and centres funded by entities that might fall within the definition of prohibited.

The third obligation targets university governance. The bill would prohibit higher education providers from appointing to their governing bodies (such as university councils or senates) any individual who: (a) holds investments in a prohibited entity; or (b) serves as a member of the board of a prohibited entity. This provision would affect the composition of university governing bodies, which typically include members drawn from business, industry, and the professions — some of whom may have connections to entities that could be classified as prohibited under the bill.

Evidence review

The Definition of 'Prohibited Entities' — Scope and Implications

The bill's official summary refers to 'defined prohibited entities' without specifying which entities are captured. The full text of the bill, available on ParlInfo, would set out this definition. Based on the bill's title, the explanatory memorandum, and the public positions of Senator Faruqi and the Australian Greens, the definition is expected to encompass entities involved in: fossil fuel extraction, processing, and distribution; the manufacture of weapons and armaments, including those exported to countries engaged in armed conflict; and possibly entities involved in gambling, private prisons or immigration detention operations.

The scope of the 'prohibited entities' definition is the single most consequential design feature of the bill. A broad definition could capture a large number of companies, including major Australian banks that finance fossil fuel projects, superannuation funds with exposure to weapons manufacturers, and multinational corporations with diverse business lines. A narrower definition might target only entities whose primary business falls within specified categories.

The definition also raises questions of indirect relationships. Many universities invest through pooled funds or third-party managers, and many research partnerships involve multiple parties. The bill would need to address whether indirect investments or partnerships through intermediaries are captured, and how universities are expected to identify and verify the status of entities across complex investment and partnership structures.

Evidence review

Who Is Affected — Universities, Students, and Industry

The bill would directly affect all Australian universities that receive Commonwealth funding — a group that includes all 41 Australian universities (37 public, 2 private with Table A/B status, and the University of Notre Dame Australia and Bond University as private providers). The financial impact would vary considerably across the sector depending on each university's existing partnership and investment profile.

Research-intensive universities in the Group of Eight, which typically have the largest and most diverse portfolios of industry partnerships and research collaborations, would face the most significant compliance burden. Universities with significant endowments or investment portfolios that include holdings in fossil fuel or defence-related companies would need to restructure those portfolios within the six-month window. The cost and feasibility of such rapid divestment would depend on the liquidity of the relevant investments and the terms of existing partnership agreements.

Students and staff — particularly those involved in campus activism movements such as Fossil Free Universities and Students for Palestine — are among the intended beneficiaries of the bill. These groups have campaigned for years for universities to sever ties with industries they consider ethically problematic. The bill would give statutory force to demands that have previously been pursued through university governance processes and public campaigns.

Companies classified as prohibited entities — and their employees, shareholders, and directors — would lose access to university research partnerships, investment capital, and governance positions. This could affect research funding in fields such as engineering, geosciences, and materials science, where industry-university collaboration is common.

Evidence review

Legislative History — Lapsed, Restored, Debated, and Pending

The bill has an eventful legislative history that illustrates the journey of private senators' bills through changes of Parliament. It was first introduced in the Senate on 13 February 2025 during the 47th Parliament. The second reading was moved the same day. Before any debate could occur, the 47th Parliament was dissolved for the 2025 federal election and the bill lapsed on 21 July 2025 — the standard fate of all bills that have not been passed at the end of a Parliament.

The bill was restored to the Senate Notice Paper on 23 July 2025, shortly after the 48th Parliament commenced. Under Senate standing orders, private senators' bills that lapsed at the end of the previous Parliament can be restored without being reintroduced, preserving their place in the legislative queue. A second reading was moved again on 6 November 2025, and a second reading debate was held on the same day — a notable milestone, as many private senators' bills never reach the debate stage.

At the time of writing (July 2026), the bill remains before the Senate. It has not been referred to a committee, has not been put to a vote, and has not proceeded further since the November 2025 debate. The next step would typically be for the debate to resume and for the Senate to vote on the second reading. If the second reading is agreed to, the bill would proceed to the committee stage (where amendments can be considered) and then to a third reading vote. It would then need to pass the House of Representatives.

Evidence review

The Political and Constitutional Context

The bill engages several significant legal and constitutional questions. The Commonwealth's power to impose conditions on university funding derives primarily from the grants power under section 96 of the Constitution and the corporations power under section 51(xx). The Higher Education Support Act already uses funding conditions extensively, including requirements relating to academic freedom, access for Indigenous students, and institutional governance. Adding divestment and governance conditions is a logical extension of this existing model, though the specific conditions proposed are novel.

A key constitutional question is whether the bill would amount to an acquisition of property on unjust terms, contrary to section 51(xxxi) of the Constitution. If universities hold contractual partnership rights or investment assets that they must divest, the requirement to do so could be characterised as an acquisition of property. Whether the acquisition is 'on just terms' would depend on whether the bill provides for compensation — a point that would need to be addressed in the legislation if it were to proceed.

The bill also engages the implied freedom of political communication. A prohibition on appointing individuals with certain investments or board memberships to university governing bodies could, depending on its breadth, affect the ability of individuals to participate in university governance. However, the High Court has held that reasonable restrictions on eligibility for public offices are generally compatible with the implied freedom, provided the restriction is for a legitimate purpose and is proportionate.

Evidence review

Evidence Gaps and Unanswered Questions

The financial implications of the bill for universities have not been publicly costed. Depending on the scope of the 'prohibited entities' definition, the total value of investments and partnerships that universities would need to divest could range from tens of millions to billions of dollars. There is no public regulatory impact statement or cost-benefit analysis accompanying the bill — typical for private members' and senators' bills, which are not subject to the government's RIS process.

The six-month divestment period, while providing a clear timeline, may not be feasible for divesting from certain assets — for example, direct property, long-dated infrastructure investments, or research agreements with multi-year contractual terms. The bill does not appear to provide for extensions, hardship provisions, or phased compliance for complex divestments.

The interaction between the bill's governance provisions and state and territory legislation governing university councils is also unclear. State university Acts typically specify the composition, appointment processes, and qualifications for members of university governing bodies. A Commonwealth prohibition on certain appointments could conflict with or override these state laws, potentially raising section 109 inconsistency questions.

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