The Australian Senate has launched a critical inquiry into what Independent Senator Fatima Payman has termed the 'failed promise' of higher education. This probe, referred to the Senate Education and Employment References Committee, aims to dissect why university degrees are increasingly failing to deliver secure employment for graduates, particularly in an era dominated by artificial intelligence (AI) tools that automate job applications and entry-level roles. Announced in March 2026, the inquiry highlights growing concerns over graduate unemployment rates hovering around 26 per cent within six months of graduation, exacerbated by AI-driven recruitment bots that sift through resumes before human eyes ever see them.
With a reporting deadline of 20 November 2026, the committee will examine the entry-level job market's economic, social, and psychological toll on young Australians. It will scrutinise whether university curricula equip students with the skills employers demand, drawing comparisons to other nations facing similar challenges. This development comes amid declining graduate job postings—down 24 per cent in 2024—and a labour market where AI is not just screening candidates but displacing them entirely.
📊 Recent Trends in Australian Graduate Employment Rates
The Quality Indicators for Learning and Teaching (QILT) Graduate Outcomes Survey (GOS) paints a sobering picture of the higher education job market. In 2024, the full-time employment rate for domestic undergraduate graduates four to six months post-graduation fell to 74 per cent, down from 79 per cent the previous year and reflecting broader labour market softening after the pandemic boom. Overall employment stood at 86.9 per cent, still above pre-2019 levels but signalling vulnerability.
Longitudinal data from the 2024 GOS-L reveals more nuance: short-term full-time employment for domestic undergraduates was 71.1 per cent, rising to 91.1 per cent three years later. Postgraduate coursework graduates fared better at 85.8 per cent short-term and 93.9 per cent medium-term. However, fields like creative arts (49.6 per cent short-term) and humanities (61 per cent) lag vocational areas such as medicine (near 99 per cent medium-term).
- Domestic undergrads: 74% full-time employment (4-6 months, 2024 GOS)
- Drop of 5 percentage points from 2023
- 26% without full-time work within six months (Senator Payman citation)
- Medium-term (3 years): 91%+ across levels
Underemployment affects 23 per cent medium-term, with graduates often in roles not fully utilising their skills due to lack of experience or unsuitable jobs.
AI's Disruption: Bots vs Human Applications
Artificial intelligence is transforming recruitment, with applicant tracking systems (ATS) and AI bots rejecting up to 75 per cent of applications before human review. Graduates writing traditional CVs risk missing keywords optimised by AI tools, turning job hunting into a 'battle of simulacra' where humans rarely interact, as Payman described. In Australia, Seek data shows graduate roles down 16 per cent, partly due to AI automating screening.
Employers like KPMG note AI spotting generic, bot-generated resumes—a common pitfall for grads. Tools like LinkedIn's AI features help tailor applications, but widen inequality for those without access. For more on navigating this, see the QILT Graduate Outcomes Survey.
Entry-Level Job Displacement by AI and Automation
AI isn't just screening; it's replacing roles. Early-career coders saw headcount drop 20 per cent from 2022-2025, per research, while Australian tech firms like Atlassian cut thousands amid AI efficiencies. Jobs and Skills Australia warns 26 per cent of jobs at high automation risk, hitting construction and manufacturing but spilling into white-collar graduate positions.
LinkedIn's 2026 Jobs on the Rise lists AI literacy as Australia's top skill, with senior AI engineers fastest-growing. Graduates in business and IT face competition from AI-augmented workers, prompting unis like University of Sydney to integrate AI modules.
Curriculum Relevance: Bridging the Skills Gap
Australian universities face criticism for outdated curricula—'recycled lectures and Zoom classes'—failing to teach AI literacy, data analysis, or soft skills like adaptability. Employer surveys rank ANU highest for employability, followed by Melbourne and UNSW, but humanities grads struggle short-term.
Initiatives like work-integrated learning (WIL) at UniSQ (84 per cent undergrad full-time employment) show promise. Micro-credentials in AI at RMIT address gaps. The inquiry will probe if degrees align with employer needs, echoing Universities Accord calls for reform.
Photo by Eriksson Luo on Unsplash
Real-World Case Studies from Australian Universities
At University of Melbourne, business grads report 80 per cent employment but 30 per cent underutilised. A UNSW engineering cohort saw AI displace 15 per cent of internships. Conversely, nursing at QUT boasts 95 per cent rates. International students fare worse: 63.4 per cent full-time in 2024, down sharply.
- UniSC: 91% postgrad employment within 4 months
- Humanities grads: +28pp gain medium-term but initial 61% full-time
- Tech grads: AI boom creates demand but automation erodes entry roles
Psychological and Social Toll on Graduates
Unemployment correlates with mental health crises; suicide is the leading cause for 15-44 year-olds. Graduates face $30,000+ HECS debt, 'humiliation rituals' of rejections, and misaligned work. Regional unis like Charles Sturt report higher impacts due to metro job concentration.
For insights, explore Jobs and Skills Australia's Gen AI Transition case studies.
Stakeholder Perspectives: Unis, Employers, Students
Universities Australia defends strong medium-term outcomes (91 per cent), pushing WIL expansion. Employers via GEURS rank employer reputation key. Students via NTEU demand curriculum overhaul. Government eyes Accord funding for skills.
International Comparisons and Lessons
UK sees 80 per cent AI use by students, US graduate debt crisis, Canada intl student caps hurting employability. Australia mirrors but leads in WIL.
Emerging Solutions and University Reforms
Unis like UTS offer AI ethics courses, TAFE- uni pathways shorten degrees. Employer partnerships, apprenticeships for grads proposed. Inquiry may recommend skills mandates.
Future Outlook: What Lies Ahead for Australian Graduates
With AI evolving, proactive upskilling vital. Optimism in 91 per cent medium-term success, but short-term fixes needed. AcademicJobs.com urges exploring roles now.
For full details, read the Times Higher Education coverage.
