Following the release of the 2026-27 Federal Budget on Tuesday, 12 May 2026, this blog entails all migration related updates. We have highlighted several important updates that may impact you. However, for a more in depth discussion, we invite you to our Australian Federal Budget 2026 Aftermath: Migration Changes Explained webinar running on Wednesday, 8 July 2026. More details on this event can be found below.
The Federal Budget delivers a steady but sharpened migration agenda, with a large focus on skills, integrity and workforce alignment, rather than expanding migrant intake. The permanent migration cap is to remain unchanged at 185,000 places, with over 70 per cent of these spots to be allocated to the skill stream. The Department has updated its website with the detailed program composition for 2026-27 to be as follows:
- Skill stream: 132,240 places (approximately 71% of the program)
- Family stream: 52,460 places (approximately 28% of the program)
- Special Eligibility stream: 300 places
Priority will be given to onshore applicants, with highly skilled offshore migrants still being considered in order to address Australia’s long term skills need. Further updates include:
Skills Assessments
There is great focus on the development of the skills assessments, a mandatory component for most Australian General Skilled Migration (GSM) and direct entry employer sponsored visas, including the Subclass 189, 190 and 186 visas.
At the moment, obtaining a skills assessments can be quite time consuming and often prolongs the visa application process for many migrants. In the incoming financial year, the Government is investing $85.2 million to deliver faster and more flexible skills assessments for migrant trades workers and to accelerate occupational licensing.
The majority of this allocation will be used for a new and more modern skills assessment system for Trades Recognition Australia (TRA). This system will facilitate the integration of occupational licensing and will work with several states and territories to pilot a more streamlined assessment-to-licensing pathway for priority trades such as electricians and plumbers.
Furthermore, a new program for onshore visa holders will be introduced. This program will ensure that their existing qualifications and practical trade experience are recognised for the purposes of gaining employment and meeting workforce shortages.
Lastly, the remainder of this investment will be used to strengthen the regulatory oversight of Assessing Authorities to drive better performance, greater transparency and clearer accountability. To ensure full transparency, Assessing Authorities will be required to publish an annual Assessing Authority Performance Report from 2027.
Upon implementation of the above systems and programs, it should take up to 6 months for applicants to be able to enter the workforce, allowing for an additional 4,000 skilled trade workers per year.
For both employers and employees, this will provide faster processing times for skills assessment results, making it easier and faster for employers to bring in electricians, plumbers and other priority trades into their workforce. Onshore visa holders will also benefit from improved recognition of existing qualifications, creating a new pipeline of job‑ready talent.
Working Holiday Maker (WHM) Program
The Government will focus on a reform for the Working Holiday Maker (WHM) program which is currently available for nationals from several countries across Asia, Europe and South America. The reform will focus on better visa control numbers, reducing barriers to work and providing fairer allocation of the use of ballots.
Employers currently relying on employees holding WHM visas may face reduced availability as visa numbers become more tightly managed. However, individuals currently holding a WHM visa may feel that they are receiving clearer and more stable work rights, benefiting their career and Australian migration progression long term.
Permanent Migration
Almost two-thirds of permanent skilled migrants are currently selected through a points tested visa such as the Subclass 189 visa. There is an intention to reform this system to better identify migrants who drive productivity and Australia’s long term prosperity. This reform means the points tested system will be optimised to select better educated, higher skilled and younger migrants overall.
This means that employers should expect a tighter, more selective skilled migration process as borderline or lower skilled applicants may not be favoured as highly as younger, better qualified and higher skilled candidates. It is important that all sponsorship and nomination applications align with the newly set out criteria.
Legislative Updates
There will be an introduction of new migration elements within legislation, including new visa refusal and cancellation grounds, and character test provisions. This means all applications submitted to the Department of Home Affairs will face stricter character based scrutiny.
Visa Compliance
Companies choosing to sponsor migrant visas are not only obligated to abide by the visa sponsorship and nomination conditions, but are also responsible for a handful of duties under the Fair Work Act.
With $27.0 million invested, there will be focus on continuing the information and education activities that improve migrant workers’ awareness of workplace safeguards, protections and compliance measures related to migration law.
Employers should be aware that their duties will become more visible, enforceable and closely scrutinised as there will be less tolerance for administrative errors.
As these changes take effect, both employers and employees will need to navigate a more selective, compliance‑focused migration structure. Competition for skilled visa places, particularly offshore, will intensify, and the expectations placed on sponsoring employers will continue to rise. Ensuring your migration strategy is proactive, compliant and aligned with the Government’s renewed focus will be essential in the year ahead.
We encourage all clients to review their current and future sponsorship plans, assess workforce needs early, and seek guidance where required. These changes, along with practical steps for adapting to them, will be explored in detail at our Australian Federal Budget 2026 Aftermath: Migration Changes Explained webinar on Wednesday, 8 July 2026, led by Director Ryan Curtis‑Griffiths and Senior Associate Heather Dzviti.
Registrations for this event are now open and can be accessed here: Australian Federal Budget 2026: Migration Changes Explained | Join meeting in Teams | Microsoft Teams
Should you have any questions or concerns in the meantime, please contact our migration lawyers on 03 9614 7111.
We look forward to supporting you through these developments.
