The Coalition's Immigration Policy - Facts and Issues

The Coalition has unveiled a substantially tighter immigration policy, proposing to reduce net overseas migration (NOM) to 100,000 a year for its first two years in government, before increasing it to 130,000 in year three and 160,000 in year four.

That compares with NOM of 292,100 in the year to March 2026. Labor is targeting 245,000 this financial year and 225,000 the following year. The Coalition says its initial target would represent the lowest migration level outside the pandemic since 2004.

The policy is not simply a reduction in skilled migration. The permanent migration program would remain capped at 185,000 places, while the composition of temporary migration would change significantly.

The Coalition proposes reducing the stock of temporary visa holders by about 650,000 over four years. Temporary Graduate Visas would largely be abolished, international student commencements capped at 240,000 and restrictions placed on dependants accompanying students. Bridging and temporary protection visas are projected to fall from around 414,000 to 20,000. The humanitarian intake would be halved to 10,000 places annually.

At the same time, the Coalition proposes increasing temporary skilled migration by about 60,000 places, introducing 15,000 Skilled Project Visas annually for major projects and giving greater priority to construction and employer-sponsored regional migration.

The economic issue

The central economic question is whether Australia can reduce population growth substantially while preserving the economically valuable parts of migration.

Lower migration would slow growth in labour supply and aggregate demand and would therefore tend to reduce headline GDP compared with a higher-migration scenario. Industries dependent on migrant labour could also face greater labour shortages.

Against this, slower population growth would reduce some of the additional demand placed on housing, infrastructure and public services.

The appropriate economic test is therefore broader than GDP growth alone. GDP per capita, productivity, housing supply, infrastructure capacity and the skills and incomes of migrants all matter.

The Coalition has not yet released comprehensive modelling of the broader economic effects, although it says the package would be budget neutral. Detailed costings are expected closer to the 2028 election.

The One Nation question

The policy also has an important political dimension.

One Nation proposes an even larger near-term migration adjustment, including reducing temporary visas by about 750,000 and producing negative net overseas migration for three years before moving to a ceiling of 130,000. Pauline Hanson has characterised the Coalition announcement as following ground already occupied by One Nation.

The significance is that some of One Nation's recent growth has come from voters who previously supported the Coalition, while immigration has become an increasingly prominent political issue.

The Coalition's 100,000 target therefore narrows the policy gap with One Nation considerably.

What remains unknown is whether voters who have moved to One Nation primarily because of immigration policy will regard the Coalition's new position as sufficient — or whether their dissatisfaction now encompasses a broader range of economic, cultural and political issues.