Higher education is one of the key foundations that economic prosperity is founded upon. Government policies, funding and strategic planning require a fine balance to stimulate growth, prosperity health and well-being. The key Australian government policies influenced by a Review of Australian Higher Education report include attracting many more Australian citizens from disadvantaged backgrounds to higher education and increasing to 40% by 2020 the number of Australian people aged 25 to 34 years attaining at least a bachelor-level qualification--a challenge, given that the current level is 29%. An added key policy is the move to a student entitlement funding model that Australia introduced from 2012, with around half of the 46 recommendations being implemented by early 2013. This article undertakes research based on secondary data from extensive literature reviews to comment critically on the efficacy of the policy approached recommended by the Review of Australian Higher Education in 2008, and now being gradually implemented. Australia faces significant challenges in higher education to rebuild, redevelop, sustain and progress higher education. The domestic and global competition for talented and skilled people is becoming more crucial. Ageing populations combined with a decreasing proportion of young people, particularly within OECD countries, exacerbates the problem. Australia, among most, if not all nations, must develop many more innovative and skilled people to sustain and rejuvenate its industry and society.