Impact of Australia Budget FY2023-24 on Immigration System

The Australian FY2023-24 Budget has just been released. Key changes relevant to the Australian immigration system, mentioned in the budget, in recent government announcements and in the surrounding commentaries include:

For the 2023–24 permanent Migration Program, the Government will return the planning level to the longer-term level of 190,000 places and will allocate 137,100 places (around 70 per cent) to the Skill stream.
Visa Application Charges (VACs) will increase by 6 percentage points for visa applications, as well as an additional 15 percentage points for select visitor and temporary visa subclasses and an additional 40 percentage points for business innovation and investment visas.
From July 1, student visa holders will be again restricted to working a maximum of 48 hours per fortnight, after the cap on working hours was lifted during the pandemic. (Students working in aged care will be exempt from the restrictions, but only until the end of the year)
The Government will introduce an improved delivery model for the Adult Migrant English Program from 1 January 2025 within existing funding, to improve English language, employment, and settlement outcomes for migrants by providing flexible tuition options, introducing a national curriculum, supporting professional development for teachers, and enhancing client support and performance management.
Focus is on supporting a better migration system by increasing visa processing capacity, expanding pathways to permanent residence for temporary skilled sponsored workers and taking steps to address migrant exploitation.
Net overseas migration is expected to hit 400k for 2022-23, 315k in 2023-2024 and remain at 260k all the way out to 2027. GDP growth is expected to be 1.5% in 2023-24.
Lower skilled migrants will be negatively affected by raising of TSMIT to $70,000 per annum

Recent announcement by DHA have also indicated that:

The Government is ensuring the system delivers the skilled migrants we need, including by:

allocating around 70 per cent of places in the 2023‑24 permanent Migration Program to skilled migrants, bringing long‑term fiscal and economic benefits and addressing persistent skill shortages
providing an extra 2 years of post‑study work rights to Temporary Graduate visa holders with select degrees, to improve the pipeline of skilled labour in key sectors
increasing the Temporary Skilled Migration Income Threshold to $70,000 to ensure skilled migration settings are better targeted
exempting international students working in the aged care sector from the capped fortnightly work hour limit until 31 December 2023
providing additional training places for Pacific Australia Labour Mobility scheme workers in priority sectors for the Pacific and Timor‑Leste and where there are job shortages in Australia.
The Government is re‑scoping 2 Skills Assessment Pilots to provide onshore migrants with fast‑tracked skills assessments, free employability assessments, and access to further training to improve their employment prospects. In addition, the Mechanism for the Mutual Recognition of Qualifications will ensure students from India and Australia will have greater certainty that the qualifications they attain will be recognised by both countries

Further commentary by third parties include:

A plan to overhaul the nation’s migration program is expected to reduce the number of low-paid immigrants entering the country by up to 31,000 a year, with the federal budget to reveal a much smaller Australia. A planned increase in the minimum wage threshold for temporary skilled migrants, from $53,900 to $70,000 from July 1, will lead to fewer migrants and ultimately contribute to a shortfall of 620,000 in Australia’s forecast population.

🚨 Press Release by Minister for Immigration, Citizenship and Multicultural Affairs

The Australian Government is investing an additional $630 million through the Department of Home Affairs and the Australian Border Force to improve Australia’s migration program and build on Australia’s already strong border and national security settings. These investments complement the Government’s proposed vision for a targeted, simpler migration system that serves our national interests and helps migrants thrive in our society and economy. The total investment includes the following new measures:

The Government is ensuring the migration system delivers the skilled migrants needed to address persistent skills shortages, by allocating around 70 per cent of places in the 2023-24 Permanent Migration Program to the Skill stream. Partner and child visas will remain demand-driven. This will complement medium and longer-term efforts to address domestic skill deficits through education, training and sectoral reform.

This Budget will:

Deliver on the Government’s election commitment to increase the Temporary Skilled Migration Income Threshold (TSMIT). After being frozen for a decade, the TSMIT will be raised from $53,900 to $70,000 from July 1, ending the suppression of wages under the former Liberal Government for both migrant and Australian workers.
Providing an extra two years of post-study work rights to Temporary Graduate visa holders with select degrees, to improve the pipeline of skilled labour in key sectors
The Government will also provide an additional $48.1 million over 12 months to support 500 visa processing officers. This will continue efforts to manage the number of visa applications on hand. Invest $27.8 million over two years to upgrade existing visa ICT systems to improve visa service delivery efficiency and increase Australia’s attractiveness in the global race for talent, students and tourists.
Continue support for vulnerable young refugees and migrant, with $9.1 million over 12 months to ensure the continued delivery of Youth Transition Support services, which improve employment, education and social connections for refugees and vulnerable migrants aged 15 to 25.