The argument is advanced that tertiary education in Australia, which comprises three sectors--universities, colleges of advanced education, and colleges of technical and further education--is hierarchically structured. Although the colleges were proposed to be of comparable status to universities, the new colleges of advanced education, which have strong vocational emphasis, have generally lesser standing academically, socially, and in terms of physical facilities. While the college sector experienced dramatic growth in the expansionary period of the 1960s and early 1970s, greater attention will need to be given to the structural relations of the tertiary education sectors in the current period of contraction, to avoid duplication and problems of social discrimination. Although under the Australian constitution control of education rests with the state government, the commonwealth has been able to control the extent and nature of higher education, particularly since 1974, when it assumed full financial responsibility for funding universities and colleges of advanced education. The extent of commonwealth power over the institutions is examined and some broader impacts of centralized control are noted. (Author/PHR)