Immigration pressures build as net migration stabilises

Treasury forecasts suggest Australia’s migration decline may soon hit its floor and could settle well above pre-pandemic levels, setting the stage for a heated political battle. Dr Abul Rizvi reports.

WHEN WILL net migration stop falling and at what level?

In terms of immigration policy, this is the crucial question because it will drive what immigration policies the Labor Government implements in the next few years and what the warring Coalition factions (Ley vs Hastie) propose.

Since net migration peaked in 2022-'23 at well over 530,000, it has been declining. It fell to 315,000 in the 12 months to March 2025. Consistent with the Prime Minister’s pre-election promise to get net migration down to pre-pandemic levels, Treasury is currently forecasting net migration to fall to around 260,000 in 2025-'26 and around 223,000 in 2026-'27. It will update this forecast in December 2025.

But are we on track for that?

In the five months from April to August 2025, net permanent and long-term movements in each of those months have been higher than in the same five months of 2024 (see Table 1). Total net permanent and long-term movements for those five months in 2024 were 161,900 compared to 191,870 in 2025.

That may be an indicator that net migration has stopped falling. But it is by no means a sufficient indicator. We need to look at other factors.

Changes in the stock of key temporary entrants give a mixed picture (see Table 2).

The ongoing rise in the stock of bridging visa holders is indicative of both a visa system in deep trouble (not just one that cannot cope with the volume of onshore visa applications, but also problems with policy settings and visa design).

It also indicates that temporary entrants are not departing at the rate the Government would want them to. Part of the bridging visa backlog is students and asylum seekers appealing their primary refusal decisions to the Administrative Review Tribunal (A.R.T.). That number is now approaching an astonishing 100,000.

Another part of the bridging visa backlog would be temporary entrants who are waiting on a decision on their onshore permanent visa application, as well as students, temporary graduates and temporary skilled entrants awaiting a decision on other onshore applications.

The ongoing rise in the stock of New Zealand citizens is the combined result of a relatively weak NZ labour market leading to record numbers of NZ citizens leaving their country, as well as changes in Australian Government policy to provide a direct pathway to Australian citizenship without first securing a permanent resident visa.

The growth in the stock of NZ citizens in Australia is net of those who secure Australian citizenship. In 2024-'25, over 33,000 NZ citizens secured Australian citizenship (far more than any other nationality). That is an average of around 2,800 per month or around 13,000 over five months.

NZ citizens continue to make a strong contribution to net migration, three to four times higher than pre-pandemic levels, possibly at around 30,000 per annum.

400,000+ bridging visa holders highlight a system in deep trouble

A record surge in bridging visas exposes years of neglect, poor policy design and migration mismanagement.

The stock of students in Australia (not including those on bridging visas) fell by almost 30,000 since end March 2025. That would be the result of students departing permanently, securing other onshore visas (temporary and permanent) and a decline in offshore student applications.

But with the Government announcing a 25,000 increase in the student planning level for 2026 and, more importantly, 15 universities being promoted from level 2 to level 1 for student visa processing purposes, we will see a strong rise in offshore student applications and grants in the next few months and during 2026.

The Government may well come to regret the decision to significantly increase the number of universities on level 1 for student visa evidentiary purposes, as it will limit the decline in the student contribution to net migration and increase the ongoing pressure on the permanent migration program (see below).

The ongoing rise in the stock of temporary graduate visa holders reflects both the boom in students during 2022-'24 and the fact that temporary graduates can no longer apply onshore for a student visa. A large portion of the 232,000 temporary graduates in Australia will eventually apply for either a skilled temporary visa or a permanent visa. Jobs and Skills Australia has confirmed that. That will also limit the increase in net migration departures. It will put more pressure on the backlog of applications for permanent migration.

The stock of skilled temporary entrants continued to rise from March 2025 to a new record of 229,179. That does not include applicants for skilled temporary visas in the bridging visa backlog. A substantial part of the increase in the stock of skilled temporary entrants is being driven by temporary graduates, especially as these now only require 12 months of skilled work experience to secure a skilled temporary visa.

Skilled temporary entrants are increasing pressure on the permanent migration program, including for employer-sponsored permanent migration, where the backlog is now over 58,000, but with a planning level in 2025-'26 of only 44,000.

The good news for the Government is a 23,000 decline in the stock of working holidaymakers. While some of that decline will be due to the regular seasonal decline in working holidaymakers during the Australian winter, part of it will be due to working holidaymakers in the bridging visa backlog, as well as working holidaymakers securing permanent residence.

The Government has significantly increased the size of permanent migration compared to the situation pre-pandemic (see Table 3).

(Data source: DHA website. Outcome for '24-'25 not yet published. *Clearance of partner visa backlog. **From '23-'24, NZ citizens no longer needed to apply for permanent visas.)

Moreover, the headline size of the migration program now understates the actual level of permanent migration because:

NZ citizens from '23-'24 no longer need to secure permanent residence. Those places are now taken by other nationalities, effectively increasing the size of the migration program while NZ citizens access Australian citizenship directly; and
Pacific Engagement Visas, which are permanent residence visas, for no good reason, are not included in the permanent migration program.

The massive surge in net migration in '22-'24 has led to a large increase in the backlog of applications for permanent migration, particularly from partner visa applicants (current backlog around 98,000 against a planning level of 40,500) and employer-sponsored visas (current backlog of around 58,000 against a planning level of 44,000).

At some stage soon, the Government will need to address these backlogs, most likely by increasing the size of the permanent migration program.

The above indicates that under current policy settings, the fall in net migration may well bottom out in either 2025 or early 2026. Moreover, it may bottom out at a level well above the pre-pandemic levels promised by the Prime Minister.

That would undoubtedly be exploited by the Coalition (both Ley and Hastie will battle that out, including Hastie’s apparent desire to abandon Australia’s non-discriminatory migration program), but they will do so providing few details of how they would reduce net migration to their favoured level. That was how Dutton and Tehan approached the issue.

Good transparent policy on immigration, as in many other nations, is hard to find.

Dr Abul Rizvi is an Independent Australia columnist and a former Deputy Secretary of the Department of Immigration. You can follow Abul on Twitter @RizviAbul.