Federal Budget 2026 and Immigration Impacts – Overview

While Immigration isn’t a major talking point for this year’s Federal Budget, there are still some key updates within the Budget Papers.

In line with improving access to housing and trying to better support the construction industry, the Federal Government is focusing on more streamlined skills recognition for trades. TRA is to introduce a more streamlined program to integrate skills assessment and occupational licensing, aiming to better recognise existing qualifications and skills to allow skilled migrants to enter the workforce up to 6 months faster. Prioritised trades include electricians and plumbers.

The Government also plans to revamp the permanent skilled migration point-test program to target better education, higher skilled, younger migrants to address skills shortages. No further details as to what the new changes would be at this stage.

Other changes announced include changes to the Working Holiday Maker program aimed to better control numbers and provide fairer allocation of WHM visas. The government will be introducing reforms including reduced barriers to work and expanding the use of the ballot system in allocation of WHM visas.

2026/27 Permanent Migration Program planning level set at 185,000 places, with 70% allocated to the Skill stream and prioritising onshore migrants for both Skill and Family streams. Remaining offshore places will be predominately allocated to high-skilled migrants.

Other funding announcements include investing in strengthening the integrity of the migration system, including addressing misuse of protection visa system by increasing the efficiency of merits and judicial review processes, enhancing scrutiny of student visa applications to improve integrity of student visa system.

The budget also outlined plans to improve visa safeguards, including further education to improve migration workers’ awareness of workplace safeguards, implementing new character and visa refusal grounds to combat antisemitism and extremism, as well as changes to Adult Migrant English program to improve access to formal English tuition for migrants most in need.

More details of immigration related announcements are outlined below:

More streamlined skills recognition

• In line with improving access to housing and strengthening the construction sector, the Federal Government is investing in more streamlined skill recognition processes.
• The Government is investing $85.2 million over four years (from 2026/27) to accelerate skills assessments for migrant trades workers and to accelerate occupational licensing, making it faster for them to enter the workforce.
• Anticipate cutting the take by up to 6 months and facilitate up to an additional 4,000 skilled trades workers into the workforce per year.
• Investment to go to Department of Employment and Workplace Relations for better recognition of migrant skills through faster, more flexible skills assessments including:

◦ $75.1m over 4 years for new, modern skills assessment system for TRA to facilitate the integration of occupational licensing

◦ Includes working with state and territories to pilot more streamlined assessment to licensing pathways for priority trades, such as electricians and plumbers

◦ $5.6 million over three years for TRA to deliver a new program of skills assessments for onshore visa holders

◦ New process to recognise existing qualifications and practical trade experience for purposes of gaining employment and addressing skills shortages

◦ $4.5 million over four years to strengthen the regulatory oversight of Assessing Authorities to drive better performance, greater transparency and clearer accountability

◦ New requirements include every Assessing Authority publishing an annual Assessing Authority Performance Report from 2027

Reforming Permanent Migration Points Tests

• The Government will reform GSM Point Tests system to better identify migrants who can drive productivity and Australia’s long-term economic prosperity,
• Will be optimised to select better educated, higher-skilled and younger migrants overall
• No further details yet as to the potential reforms

Working Holiday Maker (WHM) Program

• The Government will reform the WHM program to better control numbers, reduce barriers to work and provide fairer allocation of WHM visas
• Reforms will look to support Australia’s national interests.
• Expanding the use of ballots to support better management of the program

Net Overseas Migration (NOM) Forecasts

• New net overseas migration forecasts, with last year’s budget forecast for comparison:

• NOM is moderately higher than expected in 2025/26 and 2026/27 due to migrants on temporary visas departing Australia at lower rates than in the past.
• Arrivals of NZ citizens expect to remain strong due to Australia’s favourable labour market conditions.
• Migration Policy changes will place downward pressure on NOM

Migration Program Planning Level

• 2026/27 Permanent Migration Program planning level set at 185,000 places
• Allocating 132,240 places (over 70%) to the Skill stream
• Across both the Skill and Family streams, the Government will prioritise applications from onshore migrants, allocating 129,590 places to migrants already living in Australia, with an additional 300 places allocated to Special Eligibility.
• Remaining 55,110 offshore places will predominately be allocated to high-skilled migrants that would help address Australia’s long-term skills shortages.
• This aims to place downward pressure on net overseas migration.

Immigration Expenses in the Budget

• Immigration expenses are expected to decrease over the period 2026/27 to 2029/30, reflecting forecast reductions in transitory population in offshore processing centre and persons accessing migrant and humanitarian services
• Decrease in immigration expenses would likely mean less resources in visa processing and longer processing times.

Strengthening the Integrity of the Migration System

• The Government will provide $167.4 million over four years from 2026–27 to strengthen the integrity of Australia’s migration system.
• Includes:

◦ Funding to Federal Court of Australia and Federal Circuit and Family Court of Australia to address misuse of protection visa system by increasing the efficiency of merits and judicial review processes. To establish a pre-filing pilot for a duty lawyer legal assistance service in Sydney and Melbourne FCCOA registries

◦ Funding to strengthen system capabilities across migration system

◦ Funding to continue information and education activities to improve migration workers’ awareness of workplace safeguards, protections and compliance measures related to migration law

◦ Funding to DHA for enhanced scrutiny of onshore and offshore student visa applications, ensuring and improving integrity of student visa system

Character requirements to address Antisemitism, hate and extremism

• The Government is investing $13.6 million over five years from 2025–26 (and $1.1 million per year ongoing) for DHA to implement the migration elements of the Combatting Antisemitism, Hate and Extremism (Criminal and Migration Laws) Act 2026. This would include new visa refusal and cancellation grounds, and character test provisions.

Adult Migrant English Program

• The Government will introduce changes to the Adult Migrant English program, including changes to eligibility to target migrants most in need of formal English tuition.
• Introducing new program model from 1 Jan 2029 with flexible tuition and student supports to improve English language, employment and social cohesion outcomes for migrants.