Budget 2026–27: Tweaks, Not a Reset, for Immigration
/The Federal Budget was handed down last night, and as this is a whole-of-government financial plan, all portfolios, including the Department of Home Affairs, detail forward-looking statements of change that may affect Australia’s bottom line. Immigration is one factor of many that can materially shift this.
Australia is considered in a precarious position with housing supply and affordability issues, cost of living concerns, while also having skill shortages in certain sectors, and needing to boost productivity.
Many of the headlines from the budget were on tax reform. There was some tinkering with Australia’s immigration program.
Onshore skilled migrants to dominate permanent migration
Permanent migration places will remain at 185,000, the same number for the last two years. While permanent migration contributes to Australia’s net overseas migration (NOM), which is the net number of people migrating to Australia in a given 12 months, most permanent visas are granted to those already in Australia.
The mix of permanent visas will again be tilted heavily towards skilled migration, with 132,240 places, over 70 percent dedicated to this stream. The overwhelming majority, 129,590 places, will be allocated to migrants already living in Australia.
Points test shake-up for General Skilled Migration visas
A major skilled visa program is the points-tested General Skilled Migration visas: subclass 189 - Skilled – Independent visa, subclass 190 - Skilled – Nominated visa, and subclass 491 – Skilled Work Regional (Provisional) visa. The points test is set to be changed “to select better educated, higher‑skilled and younger migrants overall.”
Exact details are unknown, but expect more points for higher qualifications, work experience, and age.
More transparency and faster processing of trade occupation skill assessments
For GSM visas, skill assessments are mandatory. They are required for some employer-sponsored visas as well. Trades Recognition Australia, which is within the Department of Employment and Workplace Relations and is the responsible authority for skill assessments for trade occupations, will deliver a new program of skill assessment for onshore visa holders while also processing applications faster.
Furthermore, all skill assessment authorities will see greater oversight and provide more transparency and accountability as they will be required to publish performance reports from 2027.
Net overseas migration to slide
NOM is expected to reduce from 305,000 for 2024-25 to 225,000 by 2027-28. As NOM accounts for some temporary visas, likely the overseas education sector and working holiday sector will be affected. Migration of New Zealand citizens is expected to remain strong, and Australia’s special immigration relationship with New Zealand has seen a drain on young workers, and former prime ministers, opting to cross the ditch.
More regulation of working holiday makers and an increase in the use of the ballot system
The Government is set to make changes to the working holiday maker program, including subjecting more countries to the ballot system to better control numbers, provide a fairer system, and better manage the program.
There are regulations to cap the number of grants of the subclass 417 – Working Holiday visa, however, this has not been used for some time, if ever. The subclass 462 – Work and Holiday visa adheres strictly to capping.