Budget Resources

Dr Susan Love

Immigration-related measures in the 2023–24 Budget are largely continued implementations of election commitments, and also reflect the Government’s intent to reform the migration system, as informed by the March 2023 report of the independent Review of the Migration System (Migration Review). Several measures also reflect a commitment in the Australian Labor Party’s (ALP’s) 2021 National Platform to ‘ensure that, where appropriate, migrants have pathways to permanent visas and citizenship’ (p. 14). The Migration Review states in its executive summary ‘It is not in Australia’s national interest to maintain a large proportion of temporary entrants with no pathway to citizenship as it undermines our democratic resilience and social cohesion’ (p. 2) and sets as one of its ‘possible reform directions’ for the Government to ‘resolve and avoid ‘permanently temporary’ migration’ (p. 9).

The migration system and pathways to citizenship

The measure ‘Visa and migration system’ (Budget measures: budget paper no. 2: 2023–24, pp. 161–162) comprises a range of items to continue the implementation of election commitments as well as the outcomes of the Jobs and Skills Summit held in September 2022. This includes:

  • $75.8 million over 2 years from 2023–24, plus an additional $163.2 million over 2 years from 2022–23 returned from a savings measure related to the cancellation of the Global Digital Platform visa processing system project, to continue visa processing and process improvements
  • $50.0 million over 4 years from 2023–24 (and $15.3 million per year ongoing) for additional visa compliance and enforcement activities
  • an estimated $732.5 million over 5 years from 2022–23 to provide for an increase in social security and other government payments to holders of Temporary Protection visas (TPVs) and Safe Haven Enterprise visas (SHEVs) who are granted a permanent Resolution of Status visa.

The Government announced on 13 February 2023 that it would provide a pathway to permanent residence for eligible TPV and SHEV holders through the Resolution of Status (subclass 851) visa. The budget allocation of $732.5 million noted above updates the ALP’s pre-election costing (p. 9) which estimated that the measure would have a negative impact on the underlying cash balance of $407.0 million over the 4 years from 2022–23. For further details, see the Parliamentary Library’s paper Resolving the status of Temporary Protection Visa holders: a quick guide.

Another measure related to election commitments is $370.8 million over 4 years to expand the Pacific Australia Labour Mobility (PALM) scheme as part of the ‘Enhancing Pacific engagement’ measure (Budget paper no. 2, pp. 119–120), which builds on the ‘Enhancing the Pacific Australia Labour Mobility scheme’ measure in the October 2022–23 Budget (Budget measures: budget paper no. 2: October 2022–23, pp. 111–112).

The 2023–24 measure includes $168.1 million over 4 years to ‘consolidate and insource domestic operations’ for the Department of Employment and Workplace Relations (p. 1). An external provider, the Pacific Labour Facility, is currently contracted to administer the scheme. Other changes include support for workers to gain formal qualifications, additional resources to support employers and participating countries sending workers, and providing Medicare access to families participating in the family accompaniment pilot.

The changes to the PALM scheme are also expected to increase receipts by $300.0 million over 4 years from 2023–24, mostly due to additional taxation receipts (Budget paper no. 2, pp. 119–120).

Another election commitment is covered in the receipts measure ‘Migration – raising the Temporary Skilled Migration Income Threshold (TSMIT)’ (Budget paper no. 2, p. 8). The TSMIT will increase from $53,900 to $70,000 from 1 July 2023, meaning that employers seeking to sponsor workers on Temporary Skill Shortage visas must pay them at least that amount. A TSMIT increase to $65,000 was costed in the ALP’s election commitments (p. 9) as having a positive impact of $132.1 million over 4 years from 2022–23. The 2023–24 measure revises this to a decrease in receipts of $100.0 million over 5 years from 2022–23.

Most of the immigration-related measures will have a negative impact on the underlying cash balance in the Budget – in particular, the ‘Visa and migration system’ measure will cost $1.0 billion over the 5 years from 2022–23 (Budget paper no. 2, p. 161); see also the ‘Immigration policy settings for New Zealand citizens’ measure below. However, the Government will increase Visa Application Charges in addition to the indexation rate from 1 July 2023, resulting in an estimated increase in receipts of $665.0 million over the 5 years from 2022–23 (Budget paper no. 2, p. 9).

Previously announced changes to post-study work rights for the Temporary Graduate (subclass 485) visa, enabling certain graduates to stay in Australia for an additional 2 years following completion of their degrees, will increase net receipts by $614.4 million over the 5 years from 2022–23, mostly due to additional taxation receipts (Budget paper no. 2, p. 12).

Pathway to citizenship for New Zealand citizens in Australia

The ‘Immigration policy settings for New Zealand citizens’ measure (Budget paper no. 2, p. 159) does not explicitly fulfil an election commitment, but it reflects the ALP’s 2021 National Platform, which stated that the party would ‘consider the permanent residency status and potential citizenship arrangements for New Zealand citizens living in Australia under the terms of the TTTA [Trans-Tasman Travel Arrangement]’ (p. 118).

The Government announced on 22 April 2023 that from 1 July 2023, New Zealand citizens who have been living in Australia on a Special Category Visa (SCV, subclass 444 – a temporary visa) will be able to apply directly for citizenship without first becoming permanent residents. They will still have to meet other citizenship requirements, in particular the 4-year residency requirement.

This will remove the need for the current pathway to permanent residence through the New Zealand stream of the Skilled Independent (subclass 189) visa, which had higher eligibility requirements including an income threshold. Applications for this pathway were suspended from 10 December 2022, and the visa stream will close permanently from 1 July 2023.

New Zealand citizens who are granted Australian citizenship will become entitled to a range of payments and services that they cannot access as SCV holders (see the Parliamentary Library’s quick guide New Zealanders in Australia for the current arrangements).

Budget paper no. 2 states that the increase in new citizens accessing government services is estimated to cost $1.3 billion over 5 years from 2022–23, but that the measure will also increase receipts by $795.0 million over the same period (p. 159). The Portfolio budget statements 2023–24: budget related paper no. 1.14: Social Services portfolio notes that the forward estimates include $418.2 million in Department of Social Services funding for this measure (primarily for social security payments) and $543.3 million in additional National Disability Insurance Scheme funding (pp. 24; 138).

This measure could be effected through a new instrument to be made under subsection 5(2) of the Australian Citizenship Act 2007.

Pathway to permanent residence for non-citizen Indigenous Australians

The measure ‘Permanent residency and citizenship implications of the Love and Thoms High Court case’ (Budget paper no. 2, p. 160) seeks to resolve another issue of access to citizenship. The measure will enable Indigenous Australians who are not permanent residents or citizens, and who satisfy the tripartite test for Aboriginal or Torres Strait Islander status as applied by the High Court of Australia in Love v Commonwealth; Thoms v Commonwealth, to apply for a permanent Resolution of Status visa (the same subclass 851 visa as is being used to provide the pathway to permanent residence for TPV and SHEV holders).

The budget measure provides $5.5 million over 4 years from 2023–24 (and $0.2 million per year ongoing), primarily for the Departments of Home Affairs and Social Services to support the application pathway and access to government payments and services.

Net overseas migration and migration planning levels

Planning levels for permanent visas in the Migration Program are slightly reduced from 195,000 places in 2022–23 to 190,000 in 2023–24. This is higher than the 160,000 under the Morrison Government but is a return to levels set through much of the 2010s. The allocation of around 70% of the program to Skill stream places (Budget paper no. 2, p. 10) is slightly higher than the pre-pandemic balance, as shown in Table 1.

Table 1        Migration program outcome by stream, 2014–15 to 2023–24

Year Skill Family Child Special Eligibility Total % Skill % Family
2014–15 127,774 61,085 0 238 189,097 67.6 32.3
2015–16 128,550 57,400 3,512 308 189,770 69.0 30.8
2016–17 123,567 56,220 3,400 421 183,608 68.6 31.2
2017–18 111,099 47,732 3,350 236 162,417 69.8 30.0
2018–19 109,713 47,247 3,248 115 160,323 69.8 30.1
2019–20 95,843 41,961 2,481 81 140,366 69.5 30.4
2020–21 79,620 77,372 3,006 54 160,052 50.7 49.3
2021–22 89,063 51,288 3,006 199 143,556 63.4 36.5
2022–23* 142,400 52,500 3,000 100 195,000 73.1 26.9
2023–24* 137,100 52,500 3,000 400 190,000 72.3 27.7

* Planning levels

Note 1: Includes primary and secondary applicants.

Note 2: Child visa and Special Eligibility streams are excluded when calculating Skill/Family stream percentage of Migration Program outcome.

Sources: Department of Home Affairs, 2021–22 Migration Program Report, (Canberra: Department of Home Affairs, 2022), p. 14; ‘Migration Program planning levels’, Department of Home Affairs.

Most of the reduction in the number of places comes from 3,100 fewer places in the Business Innovation and Investment category. The Migration Review noted that visa holders in this category made less of an economic contribution over their lifetimes than other skilled migrants or non-migrant Australians (pp. 60–61; 65–66).

Allocations within the Family stream of the Migration Program remain the same as for 2022–23.

There has been much public commentary on the level of net overseas migration (NOM). 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 form part of the population parameters used in the Budget (Federal financial relations: budget paper no. 3: 2023–24, pp. 117–118). Table 2 shows that estimates of NOM have varied over recent budgets, due to the unpredictable effects of travel restrictions stemming from the COVID-19 pandemic.

Table 2        Net overseas migration, for years ending 30 June

Net overseas migration 2020–21 2021–22 2022–23 2023–24 2024–25 2025–26 2026–27
2022–23 Budget (March) -89,900 41,000 180,000 213,000 235,000 235,000  
2022–23 Budget (October) -85,000* 150,000 235,000 235,000 235,000 235,000  
2023–24 Budget   184,000* 400,000 315,000 260,000 260,000 260,000

* Outcomes; other figures are forecasts.

Source: Australian Government, Federal Financial Relations: Budget Paper no. 3, Table A.5, various years: 2022–23 (p. 114); October 2022–23 (p. 108); 2023­–24 (p. 118).

While NOM was negative in 2020–21, the recovery has been more rapid than initially forecast. People who could not previously enter Australia due to travel restrictions can now do so, reflecting a build-up in demand which the budget papers describe as ‘a one-off catch up from the pandemic’ (Budget strategy and outlook: budget paper no. 1: 2023–24, p. 59). While the ‘catch up’ is expected to persist over the forward estimates with a predicted level of 260,000 per year from 2024–25, NOM is projected to return to the historical trend of 235,000 per year in the medium term (Budget paper no. 3, p. 59).

NOM is not the same as the number of places available in the permanent Migration 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. In the 10 years to 2021–22, an average of 60% of Skill stream visas and 44% of Family stream visas were granted to people who had applied in Australia rather than overseas (pp. 26–28; 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 NOM, and most temporary visa categories are demand-driven (not capped). International students are the largest group of migrant arrivals


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