SYDNEY, Sept 13 - A new OECD report shows while government spending on education increased six per cent between 2010 and 2014, Australia ranks seventh-lowest among developed countries with expenditure sitting at 35 per cent of GDP. The average is 43 per cent.

Australia also has a comparatively low share of graduates in engineering, manufacturing and construction among tertiary-educated adults - 11 per cent compared to an OECD average of 17 per cent - but high numbers of students who've studied business, administration and law.

The report says international students coming to Australia are more likely than their home-grown counterparts to study those science-related subjects.

"While these patterns are common to most OECD countries, they are more pronounced in Australia," the report said.

In terms of overall spending on education, the report found Australia relies relatively heavily on private sources of funding.

Households and international students were found to contribute nearly half of all education spending in the tertiary sector - more than double the OECD average, while university tuition fees in Australia were among the highest across developed countries. 

Nearly 60 per cent of Australian undergraduates received some sort of public loan, scholarship or grant to help pay their fees.

Foreign students were also found to be paying on average more than $US10,000 ($A12,465) a year more than local students.

About 15 per cent of Australia's tertiary students are from overseas, with 294,000 enrolled in 2015. It's one of the highest shares across the OECD, and two-and-a-half times the average among developed countries.

The report comes as the federal government seeks parliament's approval for its $2.8 billion plan to cut university teaching funding in 2018 and 2019, raise student fees, lower the repayment threshold for student loans, and tie a portion of funding to performance measures such as student retention.

Labor argues the moves are unfair and will rip billions of dollars from universities and push up student fees.

Opposition education spokeswoman Tanya Plibersek said it didn't make sense to cut university funding given the report showed Australia's public expenditure on education was below the OECD average.

"The cuts to university funding of course mean students in Australia will be paying back higher debts, they'll be paying those debts back sooner under the government's proposal, and they'll be doing it for a poorer quality education as universities lose funding," she told ABC TV on Wednesday.

Education Minister Simon Birmingham said under the government's plan, spending on higher education will increase by 23 per cent and ensure students have more choices and "we get the most bang for taxpayers' bucks". 

"That means using performance funding to keep universities focused on student outcomes," he said.