I like the university proposal but also agree that it's not the only answer. Let it go ahead as it's a good idea for young super-squad and academy players but it can only be part of the answer so long as it's strictly varsity and U23.
There was a bit of info tucked away at the end of Wayne Smith's article quoted in the OP...
... recommending that a formal six-week Australian Club Championship immediately follow the National Universities competition. The clubs initially would compete within their own cities before two clubs from Sydney, Brisbane and Canberra would head to the knockout stage to be joined from the top club from Melbourne and Perth.
This is almost a mini ARC. It's not perfectly formed, but it could be built into the strong, semi-pro, 3rd tier competition we need.
- The initial proposal is for a 6 week championship. It's short, but after a few seasons the dates could be moved back to allow 8 weeks or 10 weeks or more. Then we'd be getting closer to a proper 3rd-tier comp.
- The 8 teams is probably about right to start. Playoffs involving the top clubs from each city is also okay initially, but it will lead to some problems. Either one or two clubs in each city will buy the best players over time and dominate the rest; Or the talent will be spread across the city and good players will miss out on the Top-8 comp, weakening it.
... The ways around this would be to either have rep side sides chosen from each city comp (like in the old amateur days), or to develop a few elite club teams sitting above which contract players, without age restrictions, from local and varsity comps to play in the national Top-8.
- Either way, if the National Championship expands from 6 weeks to 10+ weeks (reducing the varsity season if necessary), then the best players will concentrate more on the elite comp and will probably only play part of the season with their local clubs. This should mean the local comps are less distorted by rich clubs with more elite players.
I have left out the logistics of money and TV, etc, but the most important thing is to get started. Start modestly and affordably and grow. Then we will have the 3rd tier back.