Australia will continue to prioritise skilled immigration and give preference to onshore applicants under its recently released Federal Budget for 2026-27. Immigration has increasingly become a politically sensitive issue amid housing shortages and infrastructure pressures, immigration experts view the recent announcement as a balancing act.The Australian government has retained the permanent migration programme at 1.85 lakh places for 2026-27, with more than 70% of slots allocated to the ‘skill stream’. Across both the skill and family streams, priority for granting permanent residence will be given to onshore applicants, with 1.29 lakh places reserved for immigrants already in Australia. Remaining places will be predominately allocated to high-skilled migrants from outside Australia.Teresa Liu, managing partner for Australia and New Zealand, at Fragomen, a global immigration law firm, said the budget signals a continued preference for highly skilled migrants who can address long-term workforce shortages in the country. She noted that priority would continue to be given to onshore applicants across both the Skill and Family streams, while offshore allocations would largely focus on highly skilled candidates.The government has also reiterated plans to reform the permanent migration points test (which is relevant to non-employer sponsored visa pathways) to better target younger, higher-skilled and better-educated migrants, although detailed changes are yet to be announced.The budget also proposes faster recognition of overseas qualifications and trade skills, reforms to the points-based migration system, tighter scrutiny of student visa applications, and changes to working holiday visas.The developments come at a time when Indians have become Australia’s largest overseas-born migrant community for the first time, overtaking people born in England. According to the latest figures from the Australian Bureau of Statistics, 9.71 lakh India-born residents are now living in Australia, marginally higher than the 9.70 lakh England-born residents. The third largest group was those born in China at 7.32 lakh. Overseas-born residents now account for 32% of Australia’s population of 27.6 millionIndians and other immigrants who have not acquired permanent residence, will have to contend with a temporary ban on purchase of ‘established’ (existing) residential dwellings until June 2029.Australia’s working holiday maker programme is also set for reforms intended to better manage visa numbers and expand the use of ballot systems (lottery based selection) for high-demand countries, including India.A major focus of the budget is faster workforce integration for migrant trades workers. The government will invest AUD 85.2 million over four years to streamline skills assessments and occupational licensing, particularly for priority trades such as electricians and plumbers, with the aim of cutting workforce entry times by up to six months.The government will also spend AUD 167.4 million over four years to strengthen the integrity of the immigration system, including enhanced scrutiny of student visa applications.
