Australia’s 2026–27 Federal Budget confirms that while migration numbers may decline, skilled migration remains central to the nation’s economic and workforce strategy.
The Budget outlines several migration and workforce measures expected to impact employers, skilled migrants, and industries reliant on overseas workers.
As part of its role in connecting industry, employers and government, The Employee Mobility Institute (TEMi) Immigration Advisory Group (IAG) has reviewed the key migration announcements and their likely impact on Australian businesses.
For employers, this comes at a time when workforce shortages continue to impact business operations. Recent research conducted by the IAG found that 77% of employers are struggling to find the skills they need locally, while almost half report reduced service capacity due to ongoing talent shortages.
According to Jamie Lingham, TEMi Immigration Liaison Officer 2026 and CEO of Absolute Immigration Group, the Budget sends a clear message that employers will need to take a more strategic approach to workforce planning as Australia’s migration framework continues to evolve:
“While migration levels remain a focus of public debate, the reality is that many sectors continue to face significant workforce shortages. The Budget reinforces that skilled migration remains essential to Australia’s economic growth and workforce sustainability. Our research shows employers are not turning to overseas talent by preference, but because they have exhausted local options”.
Migration settings signal a more targeted approach
The permanent Migration Program will remain at 185,000 places for 2026–27, with approximately 70% allocated to skilled migration and 30% to family migration.
More than 129,000 places are expected to be allocated to migrants already living and working in Australia, reflecting a continued focus on retaining skilled workers who are already contributing to the Australian economy.
At the same time, the Budget forecasts net overseas migration will decrease to 245,000 in 2026–27 and reduce further to 225,000 in 2027–28.
While intended to balance migration with housing and infrastructure pressures, lower migration levels are unlikely to eliminate workforce shortages across sectors such as healthcare, construction, engineering, hospitality and technology.
The IAG’s recent employer survey found that 64.5% of organisations believe there are not enough candidates available in the local market to fill roles.
Key reforms employers should monitor
The Budget includes several initiatives that may influence future workforce planning, including:
- Proposed reforms to the skilled migration points test, with greater emphasis on younger and highly skilled applicants
- An $85.2 million investment in faster skills assessments and licensing pathways for migrant trades workers
- Reforms to the Working Holiday Maker program, including expanded ballot systems
The investment in skills assessments and licensing pathways is also expected to help qualified migrant trades workers enter the workforce more quickly, helping address skills shortages across key sectors.
A stronger focus on compliance
Migration compliance, visa integrity and national security continue to be key priorities, with additional funding allocated towards the Australian Border Force, compliance activities, expanded immigration officer training and new migration-related character and visa cancellation provisions.
Jamie Lingham believes these measures should prompt organisations to review their immigration governance and compliance practices:
“The Government’s increased investment in compliance should serve as a reminder that sponsorship obligations do not end once a visa is approved. Employers need robust governance structures, accurate record-keeping practices and clear corporate immigration policies that define responsibilities, manage risk and support compliance across the organisation”.
What this means for employers
The IAG’s recent Employer Perspectives on Skilled Migration in Australia survey found that 86% of employers believe skilled migration complements rather than replaces local hiring.
Reflecting on the survey findings, Jamie Lingham believes employers should view migration as one part of a broader workforce solution.
“Our research found that 86% of employers believe skilled migration complements rather than replaces local hiring. The most successful organisations will be those that integrate migration into a broader workforce strategy that includes local recruitment, training, retention and succession planning”.
As further details emerge, employers should use this opportunity to review their workforce plans, assess future talent needs and ensure they have the governance processes and immigration policies required to support sustainable growth in an increasingly competitive labour market.
About the Immigration Advisory Group
The Immigration Advisory Group (IAG) brings together employers, industry representatives and migration professionals to discuss emerging immigration policy, workforce challenges and practical solutions for Australian businesses.
Through collaboration, education and advocacy, the IAG provides a forum for informed discussion on the migration issues shaping Australia’s workforce and economic future.
