Dr. Pearson also pointed out that the funding available to students may depend on "where" they are. She questioned if it was possible to achieve funding equity for the students due to the diversity of funding sources. It seems to me that equity is not relevant to most research funding, as this based on the need for the research, or for trained personnel, not to provide an education, or benefit to the individual.
It might be easier to deal with the location of doctoral education by "flipping" the approach. Rather than assuming students are normally at a university department and then work out how to deal with those who are not, instead assume students could be anywhere.
One thing I have discovered with teaching is that it is easier to adapt a distance education course to on-campus use, that the other way around. Similarly it would be easier to accommodate on-campus doctoral students in a program designed for off-campus students. Most PHDs do not end up working in universities and so it would make sense if they gained experience outside the university environment. Where students must be trained at a university, it could be in a simulation of an external environment, such as a company owned by the university.
Perhaps Australian universities need to accept that only about 2,000 research doctoral graduates are required each year for the research positions available. The other 8,000 or so graduates will be working in non-research positions in government and industry. These people will need some experience with research, but not need as much as a professional researcher. It would therefore make sense for them to undertake a professional doctorate, not a PHD. These students should undertake coursework and a project relevant to their work, ideally while working in the relevant industry.
ps: However, professional doctorates are not without their own problems. In a recent paper, Burmeister (2015), discusses the low completion rates for IT professional doctorates. The causes and solutions suggested are similar to those Dr. Pearson discussed at the seminar today for research doctorates: student engagement with supervisors, feedback on progress, student engagement in the course, and student involvement in institutional communities of practice.