Australian public universities are hybrid public-private institutions. Though established and regulated by government, they have always enjoyed substantial academic autonomy and for most of their history raised some of their revenue privately. Both these aspects have become more marked over the last twenty years, with increased regulation of publicly supported activities coinciding with greater reliance on highly competitive markets for income. Though Australian public universities face major difficulties, combining public and private in the same institution has avoided the two-tier system found in Australian schools and hospitals, and encouraged universities to become more responsive to students. (Contains 5 figures.)