This article first appeared in Forum, The Edge Malaysia Weekly on August 24, 2026 - August 30, 2026

Prime Minister Datuk Seri Anwar Ibrahim announced at the PKR Annual Congress on Aug 15 that the government would abolish the Universities and University Colleges Act 1971 (AUKU). But can AUKU really be abolished just like that? And once it is abolished, will academic freedom and student autonomy immediately be restored?

We must first understand the legal nature of AUKU in order to properly assess whether the announcement is merely a political gesture or a viable policy change.

First, the provisions of AUKU that are most controversial and restrictive of academic freedom actually constitute only a small part of the Act. The remaining provisions cover the overall operating mechanisms and legal foundations of public universities, including the establishment of university boards, the appointment of vice-chancellors, financial management and the framework for university constitutions.

To make a simple comparison, AUKU is to public universities what the Private Higher Educational Institutions Act 1996 is to private universities and what the Companies Act 2016 is to private limited companies. These laws provide the legal foundations for the existence of their respective institutions — public universities, private universities and private limited companies — and establish the basic frameworks under which they can operate lawfully.

Therefore, simply abolishing AUKU would not mark the end of the problem. In fact, it could be the beginning of an even bigger one.

Some have argued that before AUKU came into existence, public universities such as Universiti Malaya — established in 1961 following the separation from its Singapore campus — and Universiti Sains Malaysia, established in 1969, were already operating normally.

That is true. But this was because, before 1971, the government had separate legislation governing individual universities, including the University of Malaya Act and the proposed legislation for the University of Penang, the predecessor of Universiti Sains Malaysia.

Times, however, have changed. Malaysia now has 20 public universities. Returning to a system in which each university is governed by its own individual Act would create an excessively cumbersome legal and administrative structure.

Taking these policy realities into consideration, the announcement by the Minister of Higher Education to have a replacement Act amid Anwar’s announcement on the abolition of AUKU actually makes more practical sense. The Ministry of Higher Education has indicated that it will formulate a new law that is more aligned with the contemporary needs of academia and talent development to replace AUKU.

In fact, during the first Pakatan Harapan administration, the Ministry of Higher Education had already completed the drafting of the Higher Education Act 2020, intended to replace AUKU and provide a legal framework covering all higher education institutions in the country, including public and private universities, technical and vocational institutions, and teacher training colleges.

Unfortunately, following the Sheraton Move, the draft was shelved after the new government came into power.

Ultimately, whether Malaysia chooses to amend or abolish AUKU, return to a system in which each university operates under its own individual legislation or revive the completed Higher Education Act 2020, the key to restoring the vitality of Malaysia’s higher education sector lies in two fundamental areas: changing the power structure governing academic institutions and, even more importantly, rethinking the financial mechanisms underpinning university operations.

For comparison, let us look at the UK, whose university governance model is relatively comparable to Malaysia’s public university system.

The UK is a global higher education powerhouse and its major universities are largely publicly funded institutions. Yet, despite being publicly funded, these universities enjoy a very broad degree of institutional autonomy.

Through historical evolution, legislation and the granting of Royal Charters, the British government has progressively decentralised authority, giving universities autonomy over personnel, finances, academic affairs and student admissions.

Malaysia, by contrast, remains considerably more centralised.

Under Schedule 1 of AUKU, the minister of education has extensive appointment powers, from determining the composition of university boards to appointing vice-chancellors and deputy vice-chancellors.

Furthermore, positions such as the university’s bursar, legal adviser and registrar — the last being essentially the highest-ranking non-academic administrative officer within a university — are appointed by the university board under AUKU. In practice, this means that ministerial influence extends indirectly into these appointments as well.

Therefore, if Malaysia genuinely wants to restore academic freedom to its higher education institutions, the first step must be to return the power of appointment currently concentrated in the hands of the minister to the universities themselves.

The composition of university boards should be recommended by the relevant stakeholders. For example, academic members could be nominated by the university senate; alumni representatives could be nominated by the alumni association; and community representatives could be recommended by the offices of members of parliament and state legislative assembly members.

The minister should no longer have broad discretionary power to appoint members according to personal preferences or interests.

The second step would be for this newly constituted university board to have full authority to recruit professors who are aligned with the university’s academic strategy and direction to serve as vice-chancellors and deputy vice-chancellors.

Only by giving universities control over their own leadership can they truly enjoy academic freedom.

Another critical factor constraining the development of Malaysia’s public universities is financial autonomy. On this issue, both the government and universities must take responsibility.

First, nearly 75% of the overall operating funding of Malaysian public universities comes from government allocations. This reality reflects the difficult financial position of public universities: they remain unable to sustain themselves financially and must continue relying heavily on government funding simply to maintain their operations.

Again, let us compare this with British universities. Generally, government grants account for approximately 12% of the overall income of UK universities while the remainder comes from tuition fees (particularly international students), research funding, intellectual property income and other sources.

The advantage of such a financial structure is straightforward: because government funding represents a relatively small proportion of university income, the government naturally has less leverage and therefore less ability to intervene in university operations.

Malaysia’s public universities face precisely the opposite situation. When 75% of operating expenditure depends on government funding, the purse strings ultimately remain in the government’s hands. Regardless of which legislation governs the universities, institutions that remain overwhelmingly dependent on government funding will never have the final say over their own affairs — and therefore cannot enjoy genuine academic freedom.

When the Ministry of Higher Education began developing the new Higher Education Act 2020 in 2019, one of its biggest challenges was persuading the Ministry of Finance to allow universities to independently recruit academic and administrative staff without having to go through the public service system.

The proposal was almost entirely rejected by the Ministry of Finance. Its rationale, however, was understandable: if the money comes from the Ministry of Finance, then the Ministry of Finance must bear responsibility for it — and therefore must retain the corresponding control.

Applying the same logic, if a university does not even have the capacity to independently hire its own academic staff, there is little point talking about academic freedom.

Therefore, if Malaysia’s public universities are to achieve genuine and lasting autonomy, they must do more than rely on legislation to grant them powers. They must also strive towards financial self-reliance.

Only when universities have the capacity to become financially self-sustaining will they possess the confidence and bargaining power necessary to secure genuine institutional autonomy.

Ooi Tze Howe is a semiconductor professional. He founded HEYA Inc, a non-profit think tank that advocates for higher education reform and fiscal reform.

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