Australia's 2026–27 Budget: A Practical Guide to the Immigration Changes

Net Overseas Migration: What the Treasury Numbers Show

Net overseas migration (NOM) — the difference between long-term arrivals and departures — has been on a downward trajectory since its post-pandemic high. According to the Australian Treasury's 2026–27 federal budget, NOM surged to approximately 550,000 in 2022–23 as borders reopened and pent-up movement was released. Since that peak, NOM has declined by around 45 per cent and is expected to continue falling through to 2027–28.

Treasury's updated forecasts show the 2025–26 NOM figure has been revised upward to 295,000 (from a prior estimate of 260,000), and the 2026–27 figure revised to 245,000 (from 225,000), with the original 225,000 target now pushed out to 2027–28. These upward revisions reflect the fact that temporary visa holders are departing Australia at lower rates than previously expected, while arrivals of New Zealand citizens are also expected to remain strong. A 2024 policy change that simplified the pathway for New Zealanders to obtain Australian citizenship has contributed to that trend.

For historical context, Australia's pre-pandemic NOM averaged around 230,000 per year. The negative NOM recorded in 2020–21 reflects the impact of border closures during the pandemic. (Source: Australian Treasury, 2026–27 federal budget. Negative 2020–21 figure reflects border closures during the pandemic.)

The Permanent Program Cap Holds at 185,000 — But the Mix Is Shifting

The 2026–27 permanent migration program planning level remains set at 185,000 places, continuing the same overall level used in 2025–26. While the headline number is unchanged, what sits beneath it has evolved considerably.

The government will allocate 132,240 places to the Skill stream, with 52,760 remaining for the Family stream. Across both streams, 129,590 places will go to migrants already living in Australia, with the remaining 55,110 offshore places predominantly directed toward highly skilled migrants. This onshore prioritisation means the impact on overall NOM is relatively contained, since these applicants are already counted as Australian residents. Refugee Council

A Long-Overdue Overhaul of the Points Test

The skilled migration points test — which ranks applicants on factors including age, English proficiency, work experience and qualifications — has not been substantially updated since 2012.

The government has confirmed it will reform the points test to better identify migrants who contribute to productivity and Australia's long-term prosperity. The revised framework is expected to favour younger applicants, those with stronger formal qualifications and workers in demonstrably high-demand occupations.

The Grattan Institute has estimated the reformed test will shape the selection of around 800,000 skilled migrants over the next decade. Specific occupational weightings and qualification benchmarks are yet to be released.

Faster Entry for Trades Workers

$85.2 million has been committed over four years to facilitate an additional 4,000 skilled trades workers into the workforce each year, with initiatives expected to reduce the time taken to enter the workforce by up to six months through streamlined occupational licensing, skills assessment and skills recognition processes. Mondaq

This includes $75.1 million over four years for a new skills assessment system for Trades Recognition Australia (TRA) to facilitate the integration of occupational licensing, and $5.6 million over three years for TRA to deliver a new program of skills assessments specifically for onshore visa holders. Construction and electrical trades are among the primary target industries. Refugee Council

The Temporary Resident Property Ban Is Extended Again

Temporary visa holders remain barred from purchasing established residential properties in Australia. The restriction, introduced following the 2025 election, has been extended by a further two years and will now remain in effect until June 2029. Purchases of newly built dwellings are not affected by the ban.

Working Holiday Visas: Tighter Controls, Easier Access Once Here

The Working Holiday Maker program will be subject to tighter management of overall intake volumes. The budget states that expanding the use of ballots in the working holiday maker program will better control numbers, reduce barriers to work, provide a fairer allocation of visas and support Australia's national interests. Ballot mechanisms, which randomly allocate visa spots from a capped pool, will be used more broadly across participating countries. Interstaff

English Tuition Gets a Structural Redesign

The Adult Migrant English Program, which currently offers free tuition to eligible new arrivals, will be retired and replaced from 2029 with a rebuilt model. The replacement program will prioritise flexible delivery options and expanded wraparound support, with resources directed toward those assessed as most in need. The government has framed English proficiency as a key enabler of both workforce participation and broader social integration.

Compliance and Integrity Investment

$19.8 million over four years has been allocated for enhanced scrutiny of onshore and offshore student visa applications. A further $27 million over two years will fund information and education activities to improve migrant workers' awareness of workplace safeguards, protections and compliance measures related to migration law. Refugee Council

The Bigger Picture

Taken as a whole, this budget represents a deliberate recalibration rather than any sharp reversal of Australia's immigration settings.

The government is moderating arrival volumes at the margins while channelling the permanent program toward skilled, onshore applicants seen as directly addressing workforce shortfalls.

Australia is moving toward a more selective and tightly managed skilled migration program that is explicitly tied to long-term economic needs. The points test reforms, given the volume of people they will affect over the coming decade, are likely to be the most consequential change in the long run. Mondaq