Migration Program 2026–27: A system recalibrated for control, targeting and onshore outcomes
Migration Program 2026–27: A system recalibrated for control, targeting and onshore outcomes
The 2026-27 Federal Budget confirms not only the size of Australia’s Migration Program, but also a continued and deliberate recalibration of how the system operates. While the headline planning level remains unchanged, the settings beneath it point to a migration framework that is becoming more targeted, more controlled, and increasingly aligned to long-term economic objectives.
For employers, sponsors and skilled migrants, these settings signal a shift away from volume‑driven migration and towards precision, compliance and contribution. Understanding how the program is being recalibrated is now essential to workforce planning and migration strategy.
Place allocation and policy intent
The permanent Migration Program will remain at 185,000 places, with 132,240 places (just over 70 per cent) allocated to the Skill stream, which covers employer‑sponsored, independent and state‑nominated skilled visas.
However, the more telling shift is in how those places are distributed. The majority (129,590 places) will be allocated to migrants already in Australia, leaving 55,110 places available offshore applicants, largely reserved for those that are highly skilled. A further 300 places are allocated to the Special Eligibility stream, which applies in limited and specific circumstances.
This configuration reflects a clear policy direction. The program is structured to prioritise individuals already contributing within Australia, while tightening and targeting offshore access. In doing so, it supports the Government’s objective of placing downward pressure on net overseas migration (NOM) — the measure of the difference between permanent and long‑term arrivals and departures — while maintaining access to critical skills.
Net overseas migration trajectory
NOM has already declined significantly, falling by approximately 45 per cent from its peak in 2022–23. Forecasts indicate that this downward trajectory will continue over the forward estimates.
NOM is estimated at 305,000 in 2024–25, decreasing to 295,000 in 2025–26, and further to 245,000 in 2026–27, before stabilising at around 225,000 from 2027–28 onwards.
In the short term, NOM is expected to be moderately higher than previously forecast. This is largely attributable to lower departure rates among temporary visa holders and continued strong arrivals of New Zealand citizens, reflecting Australia’s relatively favourable labour market conditions.
Notwithstanding this, the policy measures announced in the Budget are clearly designed to continue placing downward pressure on NOM over the medium term.
How selection rules and temporary pathways are tightening
Beyond the planning level, the Budget signals further structural reform.
The permanent migration points test is the framework used to rank and select candidates for points-tested skilled visas and is based on factors such as age, qualifications, skills and work experience. This is set to be redesigned to better identify migrants who can contribute to productivity and long-term economic outcomes. With almost two-thirds of skilled migrants currently selected through points-tested visas, this reform is likely to have a material impact. The stated direction is toward favouring younger, more highly skilled and better educated applicants, although the detail will be critical in determining how this is operationalised.
Temporary programs are also being recalibrated. The Working Holiday Maker program will see expanded use of ballot systems, reflecting a shift toward tighter control of program volumes and access. In addition, the visa application charge for Temporary Graduate visas has increased by 100 per cent from 1 March 2026, reinforcing a broader theme of managing both demand and program utilisation.
Investment in skills recognition
A significant investment of $85.2 million has been committed to improving the recognition of migrant skills. This includes the development of a modernised skills assessment system through Trades Recognition Australia, as well as pilot programs to streamline pathways from skills assessment to occupational licensing in priority trades such as electricians and plumbers. These reforms are intended to facilitate an additional 4,000 skilled trades workers into the workforce each year.
There is also a targeted initiative to improve recognition outcomes for onshore visa holders, ensuring that existing qualifications and experience can be more effectively utilised in the labour market.
In parallel, there will be strengthened regulatory oversight of assessing authorities, including a requirement to publish annual performance reports from 2027. This introduces a higher level of transparency and accountability across a part of the system that has historically been variable in its operation.
The Government will also consult on the establishment of a Skills Migration Commissioner, signalling potential further centralisation and oversight of the skills migration framework.
Integrity, compliance and system capability
Integrity and enforcement remain central to the Government’s migration strategy, with an additional $167.4 million allocated to strengthen system capability and risk management. Funding has been directed to improve the efficiency of merits and judicial review processes, including a pilot duty lawyer service in the Federal Circuit and Family Court of Australia. There is also enhanced scrutiny of student visa applications, improved system capability within the Department of Home Affairs, and more investment in education initiatives aimed at improving migrant worker awareness of workplace rights and obligations.
For sponsors and employers, these measures signal a rising expectation of compliance maturity. Sponsorship arrangements, role legitimacy, remuneration settings and ongoing obligations are increasingly subject to closer examination, with less tolerance for administrative weakness or misalignment with policy intent.
Cost settings and fiscal context
The Budget also highlights the role of migration within the broader fiscal framework.
Visa application charges are expected to generate increasing revenue over the forward estimates, rising from approximately $4.7 billion to over $7 billion. At the same time, immigration-related expenditure is forecast to decrease, reflecting reductions in transitory populations and demand for migrant and humanitarian services.
In addition, the Passenger Movement Charge will increase from $70 to $80 from 1 January 2027. The method of calculation will also change, with the charge determined by the passenger’s departure date, rather than the ticket purchase date .
While incremental, these changes are relevant for organisations managing international mobility at scale and reinforce the broader trend of recalibrating both access and cost within the system.
Foreign investment and housing settings
The Budget also extends the temporary ban on foreign purchases of established residential dwellings, reinforcing the Government’s broader approach to managing population growth alongside housing supply.
The ban, originally introduced from 1 April 2025, has now been extended by a further two years and three months to 30 June 2029. During this period, foreign persons, including temporary residents and foreign-owned companies, will generally be unable to purchase established residential property in Australia unless a limited exception applies, such as where the investment materially increases housing supply or supports its availability.
Existing exemptions continue to apply for permanent residents and New Zealand citizens. The Australian Taxation Office will continue to enforce the ban, including through enhanced screening of foreign investment proposals relating to residential property.
While not a migration measure in isolation, this setting reflects the increasing coordination between migration policy, housing availability and population planning. Migration settings, housing controls and the labour market are now being managed in a more integrated way, with tighter controls across multiple policy levers.
A more selective migration system and what it means for planning ahead
Taken together, the 2026–27 Budget measures point to a migration system that is becoming more deliberate in its design and more disciplined in its operation. There is a clear emphasis on prioritising onshore outcomes, targeting offshore migration to highly skilled cohorts, strengthening skills recognition, and enhancing integrity and compliance settings.
For employers, this places greater importance on developing onshore talent pipelines, understanding skills recognition pathways and proactive workforce and sponsorship planning. For individuals, particularly those based offshore, the pathways are becoming more selective and more closely aligned to long-term economic priorities, rather than short-term labour demand.
When these reforms are implemented, outcomes will increasingly be shaped by early strategy, eligibility positioning and risk management rather than application volume alone. Understanding how the program settings apply to specific workforce needs or migration pathways requires careful analysis of individual circumstances and forward‑looking planning.
How BDO can help
As migration settings become more selective and compliance expectations continue to rise, successful outcomes increasingly depend on clear strategy, early positioning and robust governance. BDO’s migration services team works with employers and individuals to navigate policy change, assess eligibility, manage risk and align migration pathways with long‑term workforce and business objectives in an increasingly complex system.
