Australian teacher education, like the rest of the university sector in Australia, is under significant pressure and highly politicised. In this paper, we examine ethical dilemmas facing teacher educators who, in a context of difficult and eroding work conditions, grapple with literacy needs of pre-service students. We focus particularly on building an analysis and a broad framework for improving university literacy work, encompassing ethical commitments to our students, our employing institutions and, most importantly, to children and youth from families less powerfully positioned in the social structure and in Australian schools. Our analysis is informed by the conceptual framework of Pierre Bourdieu and by critical literacy work, especially that of African-American educator Lisa Delpit. The paper concludes with suggestions for framing literacy work within a teacher education programme designed explicitly around social justice ethics. (Contains 1 note.)