Business wants uni grads with job skills

Business is urging the federal government not to shy away from changes to higher education funding.

But it also wants to make sure higher education is giving students the skills buisness needs, warning if that isn't the case then it will be increasingly hard for graduates to find jobs.

The Australian Chamber of Commerce and Industry released its updated higher education policy on Wednesday, noting the problems the Abbott government tried to fix with its plans for fee deregulation remained.

"Like it or not, federal politicians need to understand that higher education reform cannot afford to languish," chief executive James Pearson said.

He noted the large numbers of students enrolled under demand-driven funding had led to a large, unsustainable hit to the federal budget.

The policy calls for a holistic approach to government funding that incorporates universities and the vocational sector, with a strong focus on making sure courses meet industry needs.

It also wants better information for young Australians deciding what to study, including changing the name of the government's QILT (quality indicators of learning and teaching) and focusing career advice on potential jobs rather than fostering a mentality of students enrolling in courses "at the top end of their ATAR".