The Albanese government has vowed to crack down on student visa applications and prioritise migrants already in Australia, as the nation’s highly contentious migration debate enters a new phase.
After its spectacular win in the Farrer by-election, One Nation is amping up the argument migration is to blame for worsening cost of living pressures and for much of the nation’s housing crisis.
Under pressure to take action, the Albanese government announced on Tuesday night it would set the Migration Program planning level at 185,000 people.
Of those, more than 70 per cent – or 132,240 places – will be allocated to the skilled entrants stream.
The government will also prioritise migrants already in Australia, with 129,950 places allocated to them.
The remaining 55,110 offshore places will be largely allocated to “highly-skilled migrants” who would help address long-term skill needs, with 300 places for “Special Eligibility”.
Net overseas migration was forecast to fall to 245,000 in 2026-27, down from 295,000 in 2025-26, according Tuesday night’s budget papers.
Migration levels were forecast to plateau from 2027-28, remaining steady into the next decade at 225,00 new arrivals per year.
$85m for better testing
Many of those arrivals will be subject to a reformed permanent migration points testing scheme.
The government said the reforms would ensure the scheme could “better identify migrants who drive productivity and Australia’s long-term prosperity”.
Currently about two thirds of permanent skilled migrants are selected through points testing.
About $85m will be pumped into the Department of Employment and Workplace Relations over four years to reform the scheme, including $75.1m over four years for a new skills assessment system for Trades Recognition Australia.
More than $5m will also be spent over three years on a new skilled assessment for onshore visa holders, and $4.5m to strengthen regulatory oversight of assessing agencies.
The Working Holiday Maker (WHM) program will also be reformed to better control numbers and reduce barriers to work, including expanded use of ballots.
Consultation will also begin on the possible appointment of a skills migration commissioner, with the federal government seeking to strengthen the integrity of the migration system at a cost of $167.4m over four years.
That will include more than $74m over four years for the Federal Circuit and Family Court of Australia to “address misuse of the protection visa system” by increasing the efficiency of the merit and judicial review processes.
A further $46.4m will be spent over four years on strengthening systems capabilities, while $19.8m will be spent on enhanced scrutiny of onshore and offshore student visa applications.
A National Planning Level of 295,000 new student international student commencements was set for 2026, marking a 25,000 increase from 2025.
Migration under focus
Opposition Leader Angus Taylor has vowed to cut migration, which he said would open up housing supply.
However, he has yet to reveal what the Coalition’s proposed cap would be.
Mr Taylor has also pushed for a rethink of Australia’s migration system that will “put Australian values … at the heart of our immigration legislation”.
That would include “putting up a red light to radicals”.
Mr Taylor said there was “a higher risk that some bad people come from those bad countries”.
It comes as the Coalition faces an advance from the right by One Nation, whose leader, Pauline Hanson has for years criticised migration from Asian and Muslim-majority countries.
One Nation has proposed capping visas to 130,000 per year, ending student “loopholes”, and deporting so-called illegal immigrants.
The party has also called for an eight-year citizenship wait period and for Australia to withdraw from the UN Refugee Convention.
Mr Albanese has sought to reduce migration, including tightening international student migration policy, but has faced a surge stemming from Covid shutdowns.
The Prime Minister has also sought to tighten immigration rules in the wake of the Bondi Beach terror attack, including bolstered screening for anti-Semitic or racist views.
Under the 2026-27 budget, the Albanese government will seek to bolster border security by $88.6m, including $18.3m for AFP and the Australian Border Force to counter maritime people smuggling.
Interstate migration
Interstate migration, however, would remain mostly stable, with 21,400 people projected to leave NSW in 2026-27 – the same as the previous financial year – while Queensland was expected to pick up an additional 17,300 people.
South Australia was forecast to loose an 2000 residents, up from 700 in 2025-26.
The ACT was forecast to lose only 600 people, down from 1600, and Victoria was expected to pick up an additional 3300 residents.
