The Australian Government delivered the 2026–27 Federal Budget on 12 May 2026, confirming that skilled migration will remain central to Australia’s workforce strategy.

While the overall permanent Migration Program will remain unchanged at 185,000 places, the Government has announced changes affecting skilled migrants, Australian employers, Working Holiday Makers and international students.

Permanent Migration Program remains at 185,000 places

The permanent Migration Program will provide 185,000 places in 2026–27, maintaining the same overall planning level as the current program year.

The Skill stream will receive 132,240 places, representing more than 70% of the program. This includes employer-sponsored, skilled independent, state and territory nominated, regional and other skilled visa pathways.

The Government has indicated that applicants already living in Australia will receive considerable priority:

1. 129,590 places will be directed to onshore applicants;
2. 55,110 places will be available primarily to offshore applicants; and
3. 300 places will be allocated to the Special Eligibility stream.

Offshore places are expected to focus particularly on highly skilled applicants whose qualifications and experience address Australia’s longer-term workforce requirements.

For Australian businesses, the continued emphasis on skilled migration confirms that employer sponsorship will remain an important way of addressing genuine skills shortages.

Net overseas migration expected to continue falling

Net overseas migration is different from the permanent Migration Program. It measures the number of people entering Australia for an extended period less the number departing and includes many temporary visa holders.

The Budget forecasts net overseas migration of:

1. 245,000 people in 2026–27; and
2. 225,000 people in 2027–28.

Although net overseas migration has already fallen substantially from its 2022–23 peak, arrivals from New Zealand are expected to remain relatively strong due to Australia’s labour market conditions.

Changes to the skilled migration points test remain on the agenda

The Government has again confirmed its intention to reform the points test used for skilled visas such as subclasses 189, 190 and 491.

The proposed system is expected to place greater weight on factors associated with a migrant’s long-term contribution to Australia, including:

1. age;
2. qualifications;
3. skill level; and
4. employment potential.

No revised points test or commencement date has yet been released. Existing applicants and prospective applicants should therefore avoid making assumptions about how the proposed reforms may affect their points or eligibility.

Faster skills recognition for qualified tradespeople

The Government will invest $85.2 million over four years to improve skills assessment and occupational recognition processes for migrant trades workers.

The measures are intended to:

1. modernise and streamline trade skills assessments;
2. accelerate occupational licensing;
3. improve recognition of qualifications held by migrants already in Australia;
4. reduce the time required for qualified workers to enter their occupation by up to six months; and
5. assist up to 4,000 additional skilled trades workers each year.

This may become particularly important for employers experiencing shortages in construction and other licensed trades. Further operational details, including the occupations and applicants covered, will need to be released before the practical effect of the reforms is clear.

Greater investment in migration compliance

The Budget provides $167.4 million over four years to strengthen the integrity of Australia’s migration system.

This includes funding to improve government systems, educate migrant workers about workplace rights and employer obligations, and increase scrutiny of student visa applications lodged both inside and outside Australia.

Employers using sponsored visa programs should expect continued attention to sponsorship compliance, employment conditions, salary obligations and record-keeping.

Working Holiday Maker program to be reviewed

Changes are also planned for the Working Holiday Maker program.

The Government intends to improve the management and allocation of Working Holiday Maker visas, reduce barriers to employment and expand the possible use of pre-application ballots.

Ballots currently apply to applicants from certain high-demand countries, including China, India and Vietnam. The Government has not yet confirmed which additional countries or visa subclasses may be affected.

Protection visa and judicial review measures

The Budget allocates $74.2 million over four years for a migration duty lawyer pilot program.

The proposed service will provide assistance before judicial review proceedings are commenced in the Federal Circuit and Family Court of Australia. Its purpose is to help prospective applicants understand whether there is a proper legal basis to commence, continue or withdraw a court application.

Adult Migrant English Program changes

The Government also plans to reform the Adult Migrant English Program, including changes to eligibility and how English tuition is delivered.

A new program model is expected to commence on 1 January 2029, with more flexible tuition arrangements and additional support intended to improve English language, employment and settlement outcomes.

Foreign-buyer restriction extended

The temporary restriction preventing foreign persons from purchasing established residential dwellings will be extended until 30 June 2029.

Existing exemptions will continue, including relevant exemptions for Australian permanent residents and New Zealand citizens. The restriction is intended to direct foreign investment towards new housing rather than established homes.

What does the Budget mean in practice?

The main message is that Australia is maintaining a substantial permanent migration program while becoming more selective about who receives priority.

Skilled migrants, employer-sponsored applicants and people already established in Australia appear to remain central to the Government’s approach. At the same time, employers, students and other temporary visa holders should expect increased compliance activity and closer scrutiny.

Many of the Budget announcements require further legislation, policy development or administrative implementation. They do not automatically change current visa eligibility requirements.

If you are considering skilled migration, employer sponsorship or permanent residence, Hey Koala Migration can assess how the current program settings apply to your circumstances.

Contact Hey Koala Migration to discuss your Australian visa options.

This article provides general information only and does not constitute immigration assistance or legal advice. Visa requirements and government policies can change. Individual advice should be obtained before making an application or acting on this information.