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Within neoliberalism, policy implementation assimilates issues of social justice, such as diversity, by incorporating them into frameworks that pay “lip service” to important issues affecting both students and educators. This paper critically engages with higher education policies in Australia dealing with social justice, diversity, and social inclusion. Our discussion draws largely from Freirian pedagogy as well as a selective range of critical theorists to consider what we see as a radical disconnection between policy and practice in our teaching. We argue that this disjunction can adversely affect students and educators and that attention to policy’s limitations is necessary in efforts to instate a transformative teaching and learning praxis, while negotiating the contradictions we see between policy and practice. We augment our claims with fictionalised narratives from our teaching practice. These reflect but a small sample of the daily realities we experience in teaching students from a wide range of socio-cultural and socio-economic backgrounds. The paper asserts that the uncritical and undifferentiated compliance with political and moral imperatives that exemplify neoliberalism’s assimilation of social justice can produce deleterious effects on students and untenable tensions for educators.