Migration Services Perspective on Federal Budget 2023

Migration Program essential to Australia’s economic prosperity

A Budget surplus of $4.2 billion - thanks to migration - with the Migration Program continuing to be skills focused and essential to Australia’s economic prosperity.

Following the Minister for Home Affairs Clare O’Neil's repeated statements that Australia’s “migration system is broken" the unexpected budget surplus of $4.2 billion is a consequence of higher than expected commodity prices, a strong jobs market and net overseas migration forecast to be 400,000 in 2022/23, the biggest in Australia’s history.

With net overseas migration for 2023/24 forecast at 315,000 before reducing to 260,000 for each of 2024/25, 2025/26 and 2026/27, migration will continue to drive Australia’s economic prosperity.

For the 2023/24 permanent Migration Program, of the 190,000 places, some 137,100 places (around 70%) will be allocated to the Skill stream, to help address Australia’s longer-term skill needs.

Improved skills recognition will provide onshore migrants with fast-tracked skills assessments, free employability assessments, and access to further training will improve employment prospects.

The Mechanism for the Mutual Recognition of Qualifications will ensure students from India and Australia have greater certainty that the qualifications they obtain will be recognised in both countries.

In addition to CPI indexation from 1 July 2023, the visa application charges will increase by 6%, with an additional 15% for select visitor and temporary visas subclasses and a further 40% for business innovation and investment visas.

The select visa and temporary visa subclasses include visitor, working holiday, work and holiday, training, temporary activity, and temporary work (short stay specialist).

Pacific Engagement Visa and Pacific Australia Labour Mobility visas will be exempt from the increase.

These visa application charges are estimated to increase Government receipts by $665 million over five years from 2022/23.

From 1 July 2023, international student visa holders will be permitted to work 48 hours per fortnight with international students working in the aged care sector exempt from this work limitation until 31 December 2023.

Two extra years of post–study work rights will be provided to Temporary Graduate Visa holders with select degrees, to improve the pipeline of skilled labour in key sectors. Increasing post–study work rights is estimated to increase receipts by $800 million.

From 2022/23 funding of $163.2 million over two years will be returned to the Department of Home Affairs to continue its digital visa processing capabilities.

Government revenue from visa application charges is budgeted at $3.15 billion for 2023/24 and increasing to $3.574 billion for 2026/27 (and if other taxes are included some $4.82 billion for 2026/27).

BDO Migration Services will continue to contribute to Australia’s economic prosperity by helping businesses to meet labour and skilled workforce needs.

Skill shortages are impacting almost every sector, creating one of the biggest challenges that Australia has experienced in decades.

With Australia competing with all high-income countries for skills, the Budget announcements are part of the Government’s commitment to boost skilled migration, improve skills recognition and ensure that the migration system continues to contribute to a more prosperous and secure Australia.

BDO Migration Services will continue to participate in Government consultations on developing a Migration Strategy which continues to deliver for Australians and migrants.

Australia, a vast continent with a small and ageing population will continue to rely on a skill focused migration program. Australia’s Migration Program is essential to nation building and Australia’s economic recovery.

BDO's Federal Budget Analysis

Maria Jockel was interviewed by SBS World News about the migration changes in the 2023 Federal Budget. You can watch the segment here (time-stamp 40:00): https://www.sbs.com.au/ondemand/watch/2195631683615.