Budget Resources

Dr Susan Love

Net overseas migration and migration planning levels

The budget papers provide forecasts for net overseas migration (NOM), with the figure expected to decline from the outcome of 528,000 in 2022–23 to 395,000 in 2023–24 and 260,000 in 2024–25 (Federal financial relations: budget paper no. 3: 2024–25, p. 130).

NOM is the difference between arrivals to Australia and departures from Australia and includes both migrants and Australians. Migrant arrivals to Australia are counted in NOM if they are in Australia for a total of 12 months or more during a 16-month period. The forecasts for NOM are produced by the Centre for Population within the Treasury, and outcomes are calculated by the Australian Bureau of Statistics. Outcomes figures are revised as the ABS updates its calculations of arrivals and departures over the relevant 12-out-of-16-month period – the figure of 518,000 for 2022–23 in its December release has since been updated to 528,000.

NOM differs from the number of places available in the permanent Migration Program. NOM includes both permanent and temporary migrants (including New Zealand citizens) as well as Australians entering and leaving Australia. The Migration Program is decided by the government each year and sets the number of permanent visas to be granted across Skill, Family and the small Special Eligibility categories (not including the Humanitarian Program).

Many people granted visas in the permanent Migration Program are already in Australia at the time of visa grant, and will already have been counted in NOM. The Department of Home Affairs’ 2022–23 Migration Program report shows that over the 11 years to 2022–23, as an average of the annual proportions, 60% of Skill stream visas and 42% of Family stream visas were granted to people who had applied in Australia rather than overseas (Parliamentary Library calculations based on pp. 26–27; proportions were higher during the COVID‑19 pandemic when travel restrictions prevented many new migrants from coming to Australia).

People in Australia who are granted permanent visas will have entered on a temporary visa. Temporary visa holders are the largest contributing group to migrant arrivals, and most temporary visa categories are demand-driven (not capped). International students are the largest group of migrant arrivals, accounting for some 283,000 out of 737,000 arrivals in 2022–23. The government is proposing to limit the numbers of international students by legislating to provide the Minister for Education with the power to determine caps for international students for an institution, location or course – refer to the Budget review 2024–25 article ‘Australian Universities Accord’.

Due to the impact of travel restrictions during the COVID‑19 pandemic, NOM was negative in 2020–21 (‑85,000). Migration patterns have not yet returned to a pre-pandemic pattern, with the Centre for Population noting that flows of temporary migrants in particular are reflecting a ‘catch-up’ trend. Because there are more recent temporary migrants, there are also fewer migrants departing. The ABS predicts that:

Many of those now arriving on temporary visas however, such as international students, will start to leave as their studies finish over the coming years, which will have a downward impact on net overseas migration in the future.

The forecasts in the budget papers project that NOM will return to the historical trend of 235,000 by 2026–27 (Budget paper no. 3, p. 130).

Debate continues over planning for migration levels, with post Budget media reports citing a range of experts debating how migration policies may or may not influence NOM, economic growth and housing shortages. The Opposition Leader Peter Dutton in his Budget in reply speech announced a Coalition policy to cut the permanent Migration Program by 25% to 140,000 places for each of the first 2 years of its prospective term of government, before increasing it to 150,000 and 160,000 places in subsequent years.

Implementing the Migration Strategy

The government released its Migration strategy: getting migration working for the nation (the Migration Strategy) in December 2023. The Migration Strategy was developed in response to the Review of the migration system (the Migration Review, also known as the Parkinson Review), released in March 2023.

The 2024–25 Budget contains measures to continue the implementation of the 5 core objectives and 8 key actions as set out in the Migration Strategy (pp. 12–13) and to respond to the recommendations of the Rapid review into the exploitation of Australia’s visa system (the Nixon Review) presented to the government in March 2023. A range of resourcing measures to support the new initiatives and the ongoing work of the Department of Home Affairs are also provided for. Other elements of the Migration Strategy are still in development, with the government’s action plan for the strategy giving indicative timeframes for implementation throughout 2024.

Migration Program

The Migration Strategy committed to a multi-year planning model for the permanent Migration Program (pp. 79–80). As noted above, Migration Program planning figures are currently set each year and the overall level is announced as part of the Budget. A breakdown of the allocations to visa categories, as well as nomination allocations for applicable visas to state and territories, is published on the Home Affairs website. The budget measure ‘Permanent Migration Program – 2024–25 planning levels and multi-year planning’ (Budget measures: budget paper no. 2: 2024–25, p. 8) states that multi-year planning will take effect from 2025–26 and will extend over a timeframe of 4 years.

The planning level for 2024–25 is 185,000 places, a slight decrease from the 2023–24 level of 190,000 which was in turn a slight decrease from the 2022–23 level of 195,000 (The administration of the immigration and citizenship programs, 11th edition, p. 24). The budget measure is expected to reduce both receipts (by $70.0 million) and payments (by $102.7 million) over the forward estimates (Budget paper no. 2, p. 8). The reduction in revenue is largely due to reduced taxation from fewer migrants, but it would also be expected that there would be fewer migrants accessing certain government services. In addition, the measure states that the multi-year planning model ‘will enable better cross-government planning in the future’ (p. 8), perhaps resulting in efficiencies.

With the multi-year model not due to begin until 2025–26, the budget measure does not give any detail on how this will be implemented. The Migration Strategy stated that the new model will be designed and managed in consultation with the states and territories through an annual Ministerial Migration Roundtable in order to give them:

… a greater role in determining their migration needs, especially in the regions, and demonstrate the commitment of governments at all levels to planning in the national interest and to supporting cohesive policy efforts. (p. 80)

Possible models for multi-year planning include Canada’s Immigration Levels Plan, under which permanent resident admissions targets for the forthcoming 3 years are planned on a rolling basis, with the ‘notional targets’ beyond the first year to be ‘confirmed or adjusted by November 1 of each year’. The Canadian Government conducts annual consultations on the planning levels. The 2024 round of consultations includes a proposal to include temporary resident arrivals in the plan as well as permanent resident admissions.

Migrant workers and skills

Budget paper no. 2 notes that the Migration Program allocates about 70% of places to the Skill stream for 2024–25 (p. 8). This is broadly consistent with recent years, except for during the COVID-19 pandemic when places were more orientated to the Family stream (see the Budget review 2023–24 article  ‘Immigration’).

The ‘Migration system reforms’ budget measure (Budget paper no. 2, p. 136) covers a number of initiatives relating to migrant workers drawing on the Migration Strategy but stemming from earlier reviews and recommendations.

In February 2024, parliament passed the Migration Amendment (Strengthening Employer Compliance) Act 2024, which implemented a number of measures aimed at protecting temporary migrant workers from exploitation, including through implementing recommendations 19 and 20 of the 2019 Report of the Migrant Workers’ Taskforce which target employers of migrant workers. The legislation was part of a package of measures on migrant worker exploitation announced in June 2023 and built upon in the Migration Strategy. Key action 4 of the Migration Strategy on ‘tackling worker exploitation and the misuse of the visa system’ (pp. 72–77) included an item on ‘helping migrants understand their workplace rights to reduce worker exploitation’. The budget measure provides $15.0 million over 3 years from 2024–25 for information and education activities to progress this item.

The Mid-year economic and fiscal outlook 2023–24 had already provided a number of measures, including additional resourcing for the Department of Home Affairs and other agencies, for ‘Migration system integrity’ and ‘Migration system reforms’ (pp. 271–273). The ‘Migration system integrity’ measure included $10.2 million over 4 years from 2023–24 to enhance the investigative capacity of the Office of the Migration Agents Registration Authority (p. 271). The Migration Strategy included a commitment on ‘better regulated migration agents to crack down on unscrupulous activity’ (p. 75), a response to the Nixon Review’s findings on exploitative behaviour by migration agents (pp. 10–14).

A recent Australian National Audit Office report found that the Department of Home Affairs’ regulation of migration agents ‘is not effective’ (p. 8), suggesting further reform is necessary. The report’s recommendations centre around the department improving its planning and strategic processes and making greater use of the powers provided to it by the Migration Act 1958.

The Migration Strategy flagged development of a new ‘innovation’ visa (p. 59), which it suggested would replace both the existing Global Talent visa – which provides a small number of migration places for very highly skilled and talented migrants – and the Business Innovation and Investment visa program (BIIP). The budget measure ‘Migration system reforms’ includes $1.4 million in 2024–25 to close the BIIP and implement a new National Innovation visa ‘to target exceptionally talented migrants who will drive growth in sectors of national importance’ (Budget paper no. 2, p. 136).

While some stakeholders in the financial sector have been supportive of the BIIP, in particular the Significant Investor stream, criticism of the effectiveness of the program has been sustained over a number of years. In 2016, the Productivity Commission found that:

Some components of the Business Innovation and Investment Programme (BIIP) contribute to economic activity, but there is no evidence to suggest it is greater than other programs. Moreover, the BIIP does not appear to achieve its trade and innovation goals. (p. 435)

A Grattan Institute report in 2022 compared the BIIP with other categories in the permanent skilled migration program on factors including earnings, age, and skills and qualifications. It drew on Treasury modelling to show that ‘on average, each BIIP visa-holder costs the Australian taxpayer $120,000 over their lifetimes because they tend to be older when they arrive here and earn much less than other skilled migrants’ (p. 51). The report recommended abolishing the BIIP in favour of allocating more places to other skilled visas in the Migration Program (p. 52). The Migration Review noted these findings and recommended reconsidering the BIIP’s settings, potentially retaining some elements of the Significant Investor stream (p. 64–66).

Given the lead-up to the budget announcement, the business and investment sector has likely been prepared for the closure of the BIIP. The Migration Strategy had noted that pending development of the new innovation visa, ‘the Government will not provide any new allocations for the BIIP visa’ (p. 59). Allocations of migration places to the BIIP have been significantly reduced in recent years – 1,900 places were allocated in 2023–24, down from 5,000 the year before and down from a pandemic-era high of 13,500 places prior to that (The administration of the immigration and citizenship programs, 11th edition, p. 24).

All online articles accessed May 2024

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