Last Updated: 12th May 2026
*We will continue to update this blog as further information and policy details are released by the Australian Government.
The 2026–27 Australian Federal Budget has caused quite a stir, with major proposed reforms across areas such as capital gains tax, negative gearing and taxes on trusts.
However, from a migration perspective, the Budget appears comparatively positive, with several key updates aimed at improving the points test system, visa planning and Australia’s workforce priorities for the coming financial year.
While the overall Permanent Migration Program will remain stable, the government has made it clear that future migration settings will continue to focus on skilled migrants, onshore applicants and occupations that support Australia’s long-term workforce needs.
Here are the key changes announced.
Permanent Migration Program Remains at 185,000 Places
The Australian Government has confirmed that the 2026–27 Permanent Migration Program will remain at 185,000 places, the same planning level as the previous year.
Of these places, 132,240 will be allocated to the Skill stream, representing over 70% of the total program. This shows that skilled migration will continue to be a major focus for Australia, particularly in areas linked to workforce shortages and long-term economic needs.
Onshore Applicants Will Be Prioritised
A key highlight from the Budget is the continued priority given to applicants who are already living in Australia.
Across both the Skill and Family streams, the government will allocate 129,590 places (70%) to onshore migrants, with an additional 300 places allocated under Special Eligibility. The remaining 55,110 offshore places will mainly be allocated to high-skilled migrants who can help address Australia’s long-term skill needs.
This means applicants already in Australia, particularly those with strong skills, relevant qualifications and work experience, may continue to be in a more favourable position.
Points Test Reform Is Coming
The Budget also confirmed that the government will reform the permanent migration points test, which is used to select many skilled migrants.
This will be the first major update to the points test in many years, with the government aiming to better identify migrants who can contribute to Australia’s productivity and long-term prosperity.
According to the Budget papers, the updated points test will be designed to better select applicants who are better educated, higher-skilled and younger overall.
While the exact details have not yet been released, this could be an important change for future skilled migration applicants.
Faster Skills Assessments for Migrant Workers
The government will provide $85.2 million over four years to improve the recognition of migrant skills through faster and more flexible skills assessments.
This includes a new modern skills assessment system for Trades Recognition Australia, with a focus on improving pathways for priority trades.
This is a positive sign for skilled workers in trade occupations, especially as Australia continues to face workforce shortages across construction, infrastructure and essential services.
Trades Workers Will Be a Key Priority
The Budget makes it clear that trades workers will remain a major priority within Australia’s migration strategy.
With ongoing shortages across construction and related industries, the government is looking to make it easier for qualified migrant trades workers to have their skills recognised and enter the workforce more quickly.
For applicants with overseas trade qualifications and practical experience, this may create stronger opportunities in the coming years, depending on how the reforms are implemented.
Working Holiday Maker Program Will Be Reformed
The government has also announced reforms to the Working Holiday Maker program.
The Budget papers state that the reform will aim to better control numbers, reduce barriers to work, provide a fairer allocation of Working Holiday Maker visas and support Australia’s national interests. This will include expanding the use of ballots to better manage the program.
More details are expected, but this may affect how future Working Holiday and Work and Holiday visa places are allocated.
What Does This Mean for Future Applicants?
Overall, the 2026–27 Federal Budget shows that Australia is not moving away from skilled migration, but the system is becoming more targeted.
The key direction is clear:
Australia wants to prioritise applicants who are already onshore, have strong skills, meet workforce needs and can contribute to long-term economic growth.
For international students, skilled workers and temporary visa holders already in Australia, this reinforces the importance of planning early, choosing the right study or career pathway, and building a strong migration profile.
Plan Your Migration Pathway Early
With points test reform, faster skills assessments and stronger focus on skilled occupations, migration planning in Australia is becoming more strategic than ever.
If you are unsure how these changes may affect your pathway, speak with our migration and education team to understand your options and prepare ahead of future policy updates.
