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Australian budget eases pathway for migrants, but will they want to come?

The government is pondering what to do with increased migration and the budget provided some answers about its strategy

Dr Jim Chalmers, the treasurer of Australia, walked on an economic tightrope with the consistency of dental floss when he announced last week’s budget. From the left of Parliament House he was urged to do more to fight the cost of living; and from the right he was told to tighten the purse strings for rainier days to come. Chalmers had the unenviable task of finding a balance in his budget that would keep everyone happy and, not surprisingly, he failed.

The Labor Party has often been derided by the Liberal Party for being a poor financial manager. Chalmers’s budget was almost a riposte to this tired jibe, delivering a surplus for the first time in 15 years. It was conservative and considered, but it will not win many friends from either side of the political house. Australia is in the midst of a stark cost-of-living crisis with inflation running wild, and the Labor Party’s headline help in the budget was a measly 40 Australian dollars extra a fortnight for unemployment benefits.

The Liberals’ leader, Peter Dutton, focused on the budget’s migration forecasts that he believes are unsustainable while Australia deals with a housing crisis, both in terms of affordability and availability. “We all support a well-planned migration programme – and that’s the history of coalition governments,” he said. “But over five years, net overseas migration will see our population increase by 1.5 million people. It’s the biggest migration surge in our country’s history and it’s occurring amid a housing and rental crisis. Australians are struggling to rent or purchase a property now.”

Interestingly, Dutton couldn’t provide an alternative forecast that would be more palatable for Australia. However, the government is pondering what to do with increased migration and the budget provided some answers about its strategy. A variety of visas are going to become more expensive from July 1st, with a 15 per cent fee increase for working holiday, visitor, work and holiday, training, temporary activity and temporary work visas.


The Labor government is focused on encouraging highly skilled migrants to come to Australia. The budget states: “the government aims to ensure the migration system delivers the skilled migrants needed to address persistent skills shortages by allocating around 70 per cent of places in the 2023-24 permanent migration program to the Skill stream.”

The government has also lifted the temporary skilled migration income threshold from $53,900 to $70,000, again from July 1st. Labor believes that the higher salary will ensure that a stronger skilled workforce is being built in Australia. Labor has also committed to a full migration review, which will examine creating simpler pathways for skilled migrants that could potentially overhaul the current points-based system and ensure a smoother route to permanent residency.

The department of hoame affairs announced that all temporary skill shortage (TSS) visa holders will be eligible to apply for permanent residency by the end of 2023. This temporary visa lets an employer sponsor a suitably skilled worker to fill a position they can’t find a suitably skilled Australian to fill. Often, a migrant with this visa who wishes to stay in Australia is in sunny purgatory. Currently, visa holders in short-term occupations are unable to seek permanent residency. This is set to change. The government will also reduce the required employment period before seeking permanent residency from three years to two.

The working holiday visa currently allows an eligible applicant to work in Australia for two years, conditional on working regionally for three months to be eligible for the second year. If they complete this visa and want to stay in Australia but are unsuccessful in finding an employer who will “sponsor” them on to the TSS visa, there is the option of the student visa.

The budget confirmed that the work hours will be capped once again for student visa holders, following its removal during the pandemic. It will be increased by eight hours from pre-pandemic levels to 48 hours per fortnight. However, students working in the aged care sector will be exempt from the 48-hour per fortnight work limit until December 31st.

Migration in Australia is a topic that is never far from the airwaves. There is an ageing population and a need for skilled migrants, yet there are also very real concerns about the country’s ability to create suitable housing and infrastructure for new arrivals. The budget is making the pathway for permanent residency smoother, but the question is whether skilled migrants will still want to come.