Australia: Further Migration Reforms to Reduce Net Overseas Migration Announced

Following the Federal Budget handed down on May 12, 2026, the Australian government has announced further migration reforms aimed at reducing Net Overseas Migration (NOM) to 245,000 by 2027 and 225,000 by 2028. NOM measures arrivals and departures based on whether an individual has spent 12 of the previous 16 months in Australia. Although it includes Australian citizens and permanent residents, temporary visa holders (including international students and working holiday makers) currently account for approximately two-thirds of NOM. The latest figures from the Australian Bureau of Statistics show that NOM has fallen to 292,000, down significantly from its post-pandemic peak of 556,000 in September 2023.  

Summary of reforms announced:   

• Skilled, including Employer Sponsored. The latest processing direction will be updated to include new priority occupations in the resources, agriculture, aquaculture and fishing sectors, in addition to the existing sectors of healthcare, construction, education, law enforcement, and defence.  
• Independent Skilled. The points test that applies to these visas will be revised to better target skilled migrants who can contribute to the economy, including those in construction to help alleviate the housing crisis.  
• Students. Applicants for Student (subclass 500) and Temporary Graduate (subclass 485) visas will not be able to include family members in their application, with exceptions for applicants from ASEAN and Pacific Regional countries, and PhD students. Additionally, existing Student visa holders will only be able to obtain a further Student visa onshore if they enroll in a higher-level course (for example, a Bachelor's degree student can move to a Master's course, but not a Diploma).  
• Working Holiday Makers. Processing of the first Working Holiday visas will resume, albeit at a slower pace. A ballot system will be introduced for second and third Working Holiday visas for those who have completed their specified regional work and wish to renew their visa onshore. A reduced cap will be set at 45,000 for second-year visas and 5,000 for third-year visas.  
• Visitors. The “No Further Stay” condition that is currently discretionary for the Visitor (subclass 600) visa will be applied to all approvals. Travelers on this visa will need to seek a waiver based on exceptional circumstances if they wish to lodge an application for a further visa while onshore.  

The government is also expected to update processing directions for cases involving character concerns, strengthen compliance and enforcement measures relating to visa overstayers, and introduce measures allowing migration agents who knowingly support applications without merit to be banned. Although the immigration authorities did not confirm when the reforms would take effect, the measures are not expected to require parliamentary approval and may therefore be implemented in the coming days. Employers, foreign nationals and other affected applicants should monitor further government announcements and assess how the changes may affect planned or pending applications.  

This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen.