The reform of higher education in Australia begun in the 1980s and gone through a radical trans formation to a stronger competition, privatization and marketing. Since the beginning of 21st century, the Australian government intensified the reform by pushing forth the agenda "Our Universities Backing Australia Future" according to which sustainability, quality, equity and diversity are taken as the guiding principles. This paper studies the process of policy making as well as the arguments pro this policy of the Australian government.