What the 2026-27 Budget Says About Migration

Australia's federal budget, handed down on 13 May 2026, contains a significant upward revision to net overseas migration forecasts. The government now expects approximately 990,000 net overseas migrants over the four financial years to 2028-29, an increase of 55,000 compared with previous estimates. The revised figures cover two financial years: 2024-25 and 2025-26.

Treasurer Jim Chalmers attributed the higher-than-expected numbers to temporary migrants staying in Australia longer, rather than to an increase in new arrivals. He noted that net overseas migration has fallen 45 per cent from its post-pandemic peak and described the current figures as reflecting a return toward normal levels.

The Five-Year Migration Forecast at a Glance

Financial YearForecast Net Overseas Migration2024-25305,0002025-26295,0002026-27245,0002027-28225,0002028-29225,000

The trajectory shows a planned downward trend from 2025-26 onward, signalling the government's stated intent to moderate migration levels over the medium term.

The Policy Change That Matters Most for Onshore Applicants

Buried within the budget measures is a commitment to prioritise migrants already residing in Australia for places within the permanent migration program. This is the most consequential announcement for existing temporary visa holders, including holders of the Subclass 482 (Temporary Skill Shortage), Subclass 485 (Graduate), and Subclass 494 (Skilled Employer Sponsored Regional) visas.

In practical terms, this policy direction means that onshore applicants competing for employer-nominated permanent residence visas, such as the Subclass 186 (Employer Nomination Scheme) and Subclass 191 (Permanent Residence, Skilled Regional), may receive preferential processing consideration relative to offshore applicants. For skilled workers already embedded in the Australian labour market, this represents a meaningful improvement in their pathway to permanent residence.

Housing Pressure and Political Context

The upgraded migration forecasts have intensified political debate. The Coalition and One Nation have called for migration to be reduced to a level that does not outpace housing construction capacity. The Housing Industry of Australia has noted that housing supply remains constrained, and that proposed changes to negative gearing and capital gains tax concessions could result in 35,000 fewer homes being built over the next decade.

The budget acknowledges the housing pressure, noting the additional population growth implied by the revised forecasts will require approximately 22,000 more homes, based on an average household size of 2.5 persons. Labor's housing measures in this budget are expected to add 65,000 new homes, with a net increase of 30,000 homes forecast.

International Students and Temporary Visa Holders

International students remain the largest single cohort of temporary migrants contributing to population growth. Despite measures introduced by the government during its previous term to moderate student immigration, temporary visa holders continue to represent the dominant source of net overseas migration. The budget does not announce new restrictions on student visas, though political pressure to tighten student visa settings remains strong from the Nationals and crossbench.

What This Means for Your Visa Strategy

If you are currently in Australia on a temporary skilled or graduate visa, the government's stated commitment to prioritising onshore applicants is relevant to your planning. Key considerations include:

1. Confirm your current visa subclass and whether your occupation remains on the relevant skilled occupation list.
2. Assess whether your employer is willing and eligible to support a permanent nomination under the Subclass 186 or 494 pathway.
3. Review your points score if you are considering an independent skilled visa (Subclass 189 or 190), as invitation rounds remain competitive.
4. Ensure your skills assessment and English evidence remain current and valid at the time of any permanent visa application.

Key Takeaways

• Net overseas migration has been revised upward by 55,000 for 2024-25 and 2025-26 combined, reaching close to 990,000 over four years.
• Forecasts show a planned decline from 295,000 in 2025-26 to 225,000 by 2027-28.
• The government has committed to prioritising onshore temporary visa holders for permanent migration places, a direct benefit for skilled workers already in Australia.
• Housing supply remains a pressure point, with political debate likely to intensify ahead of any Coalition migration policy announcement.
• International students remain the largest temporary migrant cohort; no new student visa restrictions were announced in this budget.

The content of this article is intended for general informational purposes only and does not constitute legal advice. Immigration law is complex and subject to change. The information provided may not reflect the most current legal developments. For advice specific to your circumstances, please consult a registered Australian migration lawyer. For full terms governing use of this website and its content, please refer to our Website Terms and Conditions.

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