Australia's universities have improved their performance in the world rankings, with 22 universities in the top 400 after a year of debate about fee deregulation. 
But the Turnbull government has been warned Australia will fall behind unless it increases funding for university research to match competitors in Asia, Europe and the United States.
The University of Melbourne was Australia's top performer in the Times Higher Education world university rankings at No 33. The Australian National University in Canberra follows at 52, the University of Sydney at 56 and the University of Queensland at 60.
The University of NSW rose from 109th last year to 82nd this year, while Monash University rose from 83rd to 73rd.
Australia was the seventh most represented country in the rankings, which this year were expanded to include 800 universities.
Phil Baty, editor of the rankings, said the results showed Australia had a strong university sector.
"It's quite a bumpy year but Australia has held on really well and certainly improved its overall position," he said.
Research and development spending in Australia fell to just 2.2 per cent of the federal budget in 2014, its lowest level since 1984.
"Australia will have to raise its game to ensure it can compete with the leading western powerhouses of the US and the UK and rising stars in Asia that are heavily investing in research," he said. "You do need that cash to improve."