Universities Australia is pleased that the Gillard Government remains committed to university education and research as key drivers of Australia's future prosperity and wellbeing.

"Tonight's Federal Budget provides reassurance and stability for universities, enabling them to plan for sustainable growth," Universities Australia Chair, Professor Peter Coaldrake said this evening.

"This Budget sees the Government keeping its promises to the higher education sector. Its commitment to expand the number of university places according to student demand, and improve indexation of core university funding from 2012 have been honoured.

"It is also pleasing to see that the Government has included measures to meet the higher costs associated with provision of higher education in regional areas.

"These reforms are critical to the university sector meeting the Government's participation and equity targets for higher education, including having 40 per cent of Australia's 25-34 year olds attain a qualification at Bachelor level or above by 2025," Professor Coaldrake said.

Universities remain adamant however that the achievement of participation and equity targets should not come at the expense of teaching quality.

"Universities Australia is pleased to see the commitment of funding to DEEWR aimed at continuing the project and award funding currently provided through the Australian Learning and Teaching Council.

"This is a positive and supportive Budget for the higher education sector, and Universities Australia will continue to study the Budget papers in coming days. We will also continue to work with the Government to ensure the full implementation of the reforms recommended by the Bradley Review, and the realisation of its commitment to meeting the full cost of university research once the Budget returns to surplus," Professor Coaldrake concluded.