Australian immigration was again a very topical issue in the media in 2023. In the 2022-23 financial year, we saw a record in Net Overseas Migration with 510,000 people arriving in Australia throughout the year. This was more than 25% above the 400,000 expected in the May Federal Budget 2022-23 and more than twice the October 2022-23 forecast of 235,000. It was revealed that more people are arriving and fewer are leaving – especially new international students who typically stay for a few years to complete their studies as well as existing students who had returned after not being able to re-enter Australia during the pandemic. Overseas arrivals had clearly recovered much faster than expected after the pandemic.

Written by Sheila Woods (MARN: 0533879) of Interstaff  18 January 2024

The issue was then linked to housing shortages. Although it’s worth noting that immigration isn’t the cause of a housing crisis that has taken decades to develop, the surge in arrivals does impact an already tight rental market. While Australia’s population would have been higher if not for pandemic-related travel restrictions, this counted for little in a highly politicised debate that is still ongoing into 2024, and the practical reality for many Australians facing a rental crisis.

Given the debate, part of the objectives of the Government’s new Migration Strategy is to ‘return migration levels back to normal’. The Strategy also highlights the need for broad and multi-factor planning for migration. Read on to find out how the Government expects to reduce migration levels to near pre-pandemic levels by the next financial year as part of its strategy.

Reducing Migration to Near Pre-Pandemic Levels

During the COVID-19 pandemic, Australia’s Net Overseas Migration was negative for the first time since World War Two, meaning more people were leaving than arriving. But as borders re-opened, there has been a temporary rebound in the number of people arriving with fewer people departing. For example, this has included international students in Australia who stay for a few years to complete their studies.

While the Government expects this temporary catch-up in migration will largely offset the loss of migrants Australia experienced during the pandemic, it has outlined several actions in its Migration Strategy that will help migration return to near pre-pandemic levels by the next financial year.

These actions include:

1. Closing COVID concessions
2. Closing the Subclass 408 Pandemic Event Visa – read more here
3. Ending uncapped working hours for international students
4. Strengthening the integrity of student visas and international education
5. Increasing minimum English language requirements for Student and Graduate Visas
6. Applying greater scrutiny to high-risk student visa applications
7. Cracking down on unscrupulous education providers
8. Ending visa settings that drive long-term temporary stays in Australia
9. Shortening Graduate Visa periods
10. Ending visa settings that allow Graduate Visa holders to extend their stay in Australia in cases where applicants have fewer prospects of becoming permanent residents
11. Tackling exploitation of the visa system
12. Greater investment in resources such as immigration compliance officers
13. Restoring integrity in the Protection Visa system
14. Targeting skilled migration to genuine shortages
15. Increasing and annually indexing the TSMIT (Temporary Skilled Migration Income Threshold) or minimum salary for employer-sponsored visa holders
16. Leveraging Jobs and Skills Australia for advice on genuine skills shortages so that skilled visas can be targeted accordingly.

Business Migration, Strategic Thinking

In addition to reducing migration to near pre-pandemic levels, these actions complement the Government’s approach for better planning to ensure the right skills are in the right places, stronger integration with housing and infrastructure planning and a greater focus on visa and sponsorship compliance.

We expect the main changes that will reduce Net Overseas Migration will be a readjustment of International Student and Graduate Visa settings and the closure of the Subclass 408 Pandemic Event Visa, which is already underway. Net Overseas Migration is largely made up of temporary migrants, such as Working Holiday Makers and Students. It also includes Australian Citizens, New Zealanders and Humanitarian migrants. The Government also plans to evaluate the Working Holiday Maker program as part of its Migration Strategy.

While we can expect to see a reduction to temporary migration to Australia for certain visa categories, it seems unlikely that permanent migration levels will be affected. The permanent migration program is only one component of Net Overseas Migration and had not increased since 2022-23, therefore it is not considered to be the reason for recent increases in Net Overseas Migration. Around 60% of visas under the permanent migration program are granted to migrants that are already onshore and living in the Australian community, which minimises the permanent migration program’s near-term impact on housing, infrastructure and services.

Established in 1988, Interstaff has over 35 years of Australian visa and migration experience and provides strategic immigration advice to businesses and individuals Australia-wide and internationally. MARN: 0533879.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.