Clare O’Neil to unveil smaller migration program and tougher rules for temporary visa holders

Clare O’Neil will set out a mechanism to manage a more orderly migration inflow to help in the planning of infrastructure and social services.

Home Affairs Minister Clare O'Neil. Picture: NCA NewsWire / Martin Ollman

Australia will have a smaller overall migration intake under the landmark strategy the Albanese government will launch on ­Monday, with an emphasis on new pathways for permanent settlers and highly skilled workers, as well as tougher rules to eject the temporary visa holders the nation does not need to stay.

Home Affairs Minister Clare O’Neil will set out a mechanism to manage a more orderly and predictable migration inflow over the medium term, to help state governments in the planning of infrastructure and social services, with less emphasis on the current settings overwhelmingly driven by foreign student demand.

As well, officials say the strategy will simplify and make the goals of migration more coherent, after a wide-ranging review led by former top federal public servant Martin Parkinson, published in April, declared the visa system was broken and neither meeting the interests of locals or the migrants themselves.

A government source confirmed next week’s mid-year ­budget update would show a ­reduction in net overseas migration in coming years, to reflect recent visa vigilance and the new policy blueprint.

The new blueprint will articulate a clearer rationale for the permanent program, currently set at 190,000 places, but which drives less than two-fifths of the overall current influx.

Federal government sources are confident a recent crackdown on pandemic-era visas for temporary workers, a higher rate of visa refusal for foreign students, and fewer visa extensions for working holiday makers will suppress the number of arrivals in coming years.

Already the rate of visa refusal for foreign students is on the rise, particularly for applicants from high-growth countries where ­immigration officials have detected fraudulent documentation and where it is suspected that the right to work, rather than study, is the primary motivation.

As well, the federal government is ending a pandemic-era visa for about 120,000 temporary workers and is addressing longstanding visa-integrity issues that have undermined public confidence and led to worker ­exploitation by unscrupulous ­operators.

The Albanese government has come under fire from its political opponents over the surprise population boom, claiming Labor has lost control of borders and is effectively running a “Big Australia” migration program by stealth.

The post-pandemic population boom has caught Treasury and monetary officials napping, producing a spike in home values and rents, and exposing debt-laden states to unrelenting pressure on services.

The influx of 172,000 foreigners with work rights in the first four months of this financial year, or 10,000 people a week, is hindering the ­Reserve Bank’s ability to read the underlying health of the economy and raising fears it could inflame homegrown inflation, which is running at just under 5 per cent or twice its three-decade average and the midpoint of the mandated target.

Martin Parkinson. Aaron Francis / The Australian

But the migrant-led population surge is keeping aggregate output growth in the economy in positive territory and easing skills shortages for employers in areas such as hospitality.

Treasury’s May estimate for the net migrant inflow in 2022-23 of 401,700 has been blown out of the water, as a record number of students, backpackers and workers on temporary visas hit these shores, and those already here were able to extend their stays to help employers fill a record high level of post-Covid vacancies.

In the year to March, net migration was 454,400, with new figures for the June quarter to be released on Thursday by the Australian Bureau of Statistics.

Experts predict the 2022-23 ­financial year produced a migrant inflow of close to 500,000, with the record influx continuing over the winter and autumn.

Treasury’s net overseas migration estimate in May for the current financial year is 316,000.

Last week, the ABS projected the population rose by 0.7 per cent in the September quarter, or 190,000 people, with migration likely accounting for about 80 per cent of the increase or 152,000.

But according to a source familiar with the Mid-Year Economic and Fiscal Outlook, in the latter part of the budget’s four-year planning period, and beyond into the medium term, net overseas migration will be scaled back under the influence of the changes to the visa system to below recent long-run averages of around 230,000 a year.

According to the Department of Home Affairs, since the start of July, the number of people here on student visas has increased by 104,000, or ­almost a fifth, to stand at a high of 673,000.

Other figures from the department show that in the four months to the end of October, the student visa approval rate for ­primary applicants fell to 79.6 per cent, from 85.7 per cent last financial year.

In the decade prior to the pandemic, the visa grant rate never fell below 90 per cent.

The tightening of student visas has been most pronounced for the higher education sector, where the grant rate fell from 96 per cent during the pandemic to 80.4 per cent in the first four months of this financial year.

In a press conference in Sydney on Saturday, Prime Minister Anthony Albanese said his government had a “plan to fix migration” and would announce a new migration strategy this week to bring migration back to “sustainable levels”, noting parts of the migration system that had been “abused”.

“People are coming here, enrolling in courses that don’t really add substantially to either their skills base or to the national interest here. So, it’s not in the interests of our neighbours, nor is it in the interests of Australia, that there not be a crackdown on this,” Mr Albanese said.

“We have a plan to fix migration by ensuring Australia can get the skilled workers Australia needs, but putting an end to any abuse and any rorts,”

He said there was always going to be a jump in migration numbers post Covid, and the population figures were lower than those projected before the borders were shut.

Additional reporting: Elise Kaine