The idea of the university as it originated in medieval Europe was that of a self-governing community of teachers and students. However that ideal has been undermined in Australia, where legislative changes over the past 20 years have led to a progressive diminution in university autonomy. Changes to Commonwealth and State legislation mean that universities are now subject to the same internal governance rules as trading corporations, and these are incompatible with the mission of a university and with academic independence. In addition, the regulation of universities has become so invasive that they can no longer be seen as truly autonomous self-accrediting institutions. This article examines the harmful effect of these changes and suggests what changes should be made to the law in order to restore a governance framework for universities which is consistent with their social purpose.