Federal Budget 2026–2027: What It Means for Australian Immigration

The Australian Government has delivered the Federal Budget for 2026–2027, outlining its plans for expenditure and policy settings impacting Australia’s migration program.

The Budget includes several immigration-related measures, many of which have been announced at a high level, with further detail expected to follow.

The key changes are summarised below.

Migration Program Planning Levels / Net Overseas Migration

The Government has maintained the permanent Migration Program planning level at 185,000 places, with an approximate 70% Skilled / 30% Family split, consistent with prior years.

A notable shift is the continued prioritisation of onshore applicants, with 129,590 places allocated to migrants already in Australia. The remaining 55,110 offshore places are expected to focus on highly skilled migrants to support Australia’s long-term workforce needs.

Net Overseas Migration (NOM) is forecast to decline to 245,000 in 2026–27, and further to 225,000 in 2027–28, reflecting the Government’s broader objective of moderating migration levels over time.

Changes to the Points Test

The Government has indicated that the permanent migration Points Test will be refined to better target:

• Younger migrants;
• Higher-skilled applicants; and
• Individuals with stronger educational backgrounds.

While almost two-thirds of permanent skilled migrants are currently selected through points-tested visas, no detailed reforms have been released at this stage, and further announcements are expected.

Recognition of Overseas Qualifications and Skills

The Government will invest $85.2 million to improve the efficiency of skills assessments and accelerate occupational licensing pathways, particularly for trade occupations.

Key measures include:

• Development of a new, modern skills assessment system through Trades Recognition Australia (TRA);
• Pilot programs to streamline assessment-to-licensing pathways in priority trades such as electricians and plumbers;
• A new program to assess the skills of onshore visa holders, supporting workforce participation; and
• Enhanced regulatory oversight of assessing authorities, including a requirement to publish annual performance reports from 2027.

These reforms are expected to facilitate approximately 4,000 additional skilled trades workers entering the workforce each year.

In addition, the Government will consult on the potential introduction of a Skills Migration Commissioner.

Addressing Misuse of the Protection Visa System

The Government will introduce a pilot program titled ‘Addressing Misuse of the Protection Visa System’, with funding of $3.9 million.

This initiative will fund migration duty lawyers to provide pre-filing legal assistance in Federal Circuit and Family Court matters, assisting applicants to make informed decisions before lodging judicial review applications relating to protection visa claims.

Working Holiday Visa Program

The Working Holiday Maker (WHM) program will be reformed to:

• Expand the use of ballot systems to manage demand;
• Provide a fairer allocation of visas; and
• Better align the program with Australia’s national and labour market interests.

Australian Border Force and National Security Measures

The Budget includes significant funding directed towards compliance, enforcement, and national security functions:

• $270 million in supplementary funding to the Australian Border Force for 2026–27;
• $207.4 million over five years to combat antisemitism, extremism, and hate-related conduct;
• New migration-related legislative measures, including expanded visa refusal and cancellation powers and revised character test provisions; and
• Additional training for visa decision-makers in relation to hate-related conduct.

Further funding has also been allocated to support the Commonwealth Community Safety Order Scheme, enabling court-based supervision or detention orders for certain non-citizens who pose a risk to the community.

Support for Trafficked People

The Support for Trafficked People Program Additional Referral Pathway has been extended to 30 June 2027.

This program ensures victim-survivors of human trafficking and modern slavery can access:

• Legal and migration advice;
• Financial assistance;
• Medical support; and
• Safe accommodation,

without requiring engagement with law enforcement.

Protecting Migrant Workers

The Government will provide $27 million over two years to extend the Protecting Migrant Workers – Information and Education program.

This initiative delivers targeted education and outreach activities to ensure migrant workers are informed about:

• Workplace rights;
• Employer obligations; and
• Compliance frameworks under migration laws.

Key Takeaways

Overall, the 2026–2027 Federal Budget reflects a continued focus on targeted, productivity-driven migration, with tighter control over volumes and outcomes.

From a corporate migration perspective, maintaining the 185,000 planning level with a 70% Skilled allocation reinforces the ongoing importance of skilled migration to support the economy. However, the strong prioritisation of onshore applicants signals a more constrained pathway for employers seeking to recruit directly from overseas.

Offshore places are increasingly directed towards highly skilled candidates, meaning employers can expect greater competition and scrutiny when nominating offshore talent. This places added importance on clearly demonstrating genuine skill shortages and aligning nominations with priority workforce needs.

While details are limited, the planned refinement of the Points Test suggests a continued shift towards higher calibre candidates, which may further increase reliance on employer-sponsored pathways such as the Skills in Demand (subclass 482) and Employer Nomination Scheme subclass 186 programs.

Encouragingly, the Government’s investment in faster skills assessments and licensing pathways, particularly in the trades, should assist employers dealing with ongoing labour shortages and improve the utilisation of onshore visa holders.

At the same time, enhanced compliance measures and migrant worker protections reinforce that employers must maintain robust sponsorship and workplace compliance practices, as regulatory scrutiny is expected to remain strong.

In practical terms, employers will need to adopt more structured, forward-looking migration strategies, with a clear shift away from opportunistic recruitment towards planned and targeted workforce solutions.