Opposition Leader Tony Abbott speaks at the Universities Australia Higher Education Conference in Canberra.

Opposition Leader Tony Abbott speaks at the Universities Australia Higher Education Conference in Canberra. Photo: Andrew Meares

Australian universities are turning out too many graduates who can't grasp serious public policy issues, according to the former Treasury secretary Ken Henry.

In a closing address to the Universities Australia conference in Canberra, Dr Henry asked why higher education facilities had become so good at producing so many graduates ''who appear to take so little interest in the nation's future''.

''I would say that we need to ensure that there are more people coming out of universities who are policy competent,'' he said on Thursday afternoon.

''I'm going to sound like a grumpy old man, but when I was a student students used to demonstrate in the streets about policy issues. When is the last time you saw a demonstration in the streets about a policy issue? What is going on? It's not as if there are no policy issues.''

Dr Henry, the executive chairman of the Australian National University Crawford Institute of Public Policy, also urged academics to take a greater role in public debate as he renewed his criticism of the quality of discussion that took place in Australia.

He had a positive view of the ''enormous opportunities'' that Australia could grasp in the Asian century, but warned the nation must deal with the accompanying policy challenges.

Universities to build research alliances across the region and produce graduates who were ''Asia-capable'', he said.

Dr Henry also said most of the government objectives for universities could be achieved in better ways than regulation and if it was up to him he would deregulate university fees.

''I think we should at least ask the question, shouldn't we, of how much of the existing burden of regulation on the sector is really necessary. We really should ask ourselves that question because I reckon most of it is not.''

Dr Henry's comments about regulation came hours after Opposition Leader Tony Abbott promised a hands-off approach to the higher education sector if the Coalition won the September 14 federal election.

Mr Abbott pledged to cut the regulatory burden on universities and said a Coalition government would deliver ''relative policy stability'' rather than drastic changes to the sector.

''Often there is little that government can contribute except interference. Higher education is one area where government's role is more to be a respectful listener than a hands on manager,'' he told the conference on Thursday morning.

National Union of Students president Jade Tyrrell said Mr Abbott failed to address key student issues including whether the Coalition would deregulate university fees.