The Australian Government has announced a fundamental reform of the migration system to make it more future-ready. This follows a comprehensive review of the existing framework. The outcome: the current system was assessed as no longer fit for purpose, with outdated rules that reduce Australia’s competitiveness in a global context.

The reform is intended to achieve simplification above all else: fewer visa subclasses, higher salary requirements, and faster processing through targeted prioritisation. The goal is to align the migration program more closely with the actual needs of the Australian labour market, make Australia more attractive to skilled migrants, and create clearer and faster pathways from temporary work visas to permanent residence.

This signals a broad overhaul across Australia’s visa system. Temporary work visas and permanent visas (Permanent Residency) for skilled migrants are particularly in focus. Family visas are also expected to be updated over time to reflect current requirements.

So far, only high-level elements of the proposed changes have been released. However, it is already apparent that this will be the most significant overhaul since the 1990s. Below is a summary of the key areas of the planned reforms:

New categories for temporary work visas

Temporary work visas are currently subject to a range of rigid and inflexible requirements. The outdated skilled occupation lists are expected to be replaced by a completely new system designed to respond more flexibly and more precisely to labour market needs. These fundamental changes are intended to simplify the process of sponsoring employees for a work visa for both employers and visa applicants.

In future, employer sponsorship is expected to be structured into three categories:

  1. A category for people with job offers in highly paid and highly specialised roles. These visas are intended to be prioritised for faster processing and reduced administrative complexity, regardless of whether the occupation is on a skills list. However, it is still unclear what income level will qualify as “highly paid” and whether additional requirements will apply.

  2. A second category for people with a job offer with a salary of AUD 70,000 or more, but below the “highly paid” category.

  3. A third visa category designed specifically for industries and sectors experiencing severe workforce shortages and long-term unmet labour demand. This category is expected to have no income thresholds and is likely to include roles that are not highly skilled. Aged care, nursing and early childhood education/care were highlighted in particular.

As a first step, from 1 July 2023 the minimum income requirement for a temporary skilled visa under the current system is scheduled to increase to AUD 70,000..

A clearer pathway from temporary visas to permanent residence

Under the current system, many temporary work visa holders have no realistic long-term pathway to stay, but only temporary options to remain in Australia for work and residence. The reform is intended to change this.

The Government has announced that temporary work visa holders are expected to have clearer and faster pathways to Permanent Residency in the future. The stated goal is to provide migrants with a long-term perspective in Australia from the outset.

Reform of the points test for skilled visas

For many migrants, the pathway to permanent residence is through Australia’s skilled visas and therefore through the points test. The purpose of the test is to identify candidates who are particularly attractive to Australia and the Australian labour market.

However, the review concluded that the points test in its current form is not sufficiently effective at identifying and attracting migrants with the right qualifications and capabilities. As a result, the current categories used in the points test are expected to require fundamental adjustment.

The Government does not intend to delay the modernisation of the points test. The responsible Minister, Clare O’Neil, has stated that this area is a high priority and that changes in this space may be implemented relatively soon.

Student Visa

The international student sector has long been an important part of Australia’s migration program, and a significant share of those who complete tertiary study or vocational training in Australia aim to remain permanently. Under current rules, however, it can be complicated or time-consuming for many students to obtain Permanent Residency after completing their studies or training.

For students in Australia, the reform is therefore expected to introduce clearer pathways from study through to permanent residence, provided certain conditions are met.

Working Holiday Visa

The primary purpose of the Working Holiday Maker program is cultural exchange and experiencing a country through travel and occasional work. However, current rules allowing a Working Holiday visa to be extended for up to two additional years under certain conditions have shifted the focus away from that original purpose.

In particular, recent expansions and relaxations relating to specified work requirements for extending a Working Holiday visa have progressively diluted the program’s original purpose. Against this background, it is being considered whether Working Holiday stays should be limited to 12 months in the future, with the second and third year visas being discontinued.

Parent and family visa

Australia’s family visa system—especially visas for parents of Australian permanent residents or citizens—also requires a comprehensive overhaul. This was another key conclusion of the Government’s review, which emphasised that family reunion is an important component of a strong and stable society.

At the same time, it was made clear that reforming temporary work visas and skilled visas is the immediate priority and will be addressed first. As a result, there is currently no information available on specific changes to family visas.

Business & Investor visas, Global Talent visa

A fundamental reform is also being considered for Australia’s Business & Investor visa program and the Global Talent visa. However, no concrete details have been published to date.

Assessment

At this stage, only a few broad elements of the reform are known and the announced changes remain general. As always, the details matter—particularly in a complex area such as migration settings. The changes are likely to have wide-ranging effects, with positive outcomes for some and potentially less favourable impacts for others.

Entry via temporary work visas is expected to become easier for many prospective migrants. In particular, health and aged care roles may finally see more realistic visa opportunities through this pathway. However, higher income thresholds may become a barrier for some occupations, especially in regional Australia.

As most permanent migrants obtain their status through skilled visas and therefore via the points test, changes to the points test will have a significant impact on Permanent Residency prospects. Some applicants who currently perform well in the existing system may no longer meet the requirements in future, while others may gain new or improved opportunities. At this stage, it is too early to say who will benefit and who will be disadvantaged.

What is clear, however, is this: if you currently have strong prospects for a permanent visa, it may be worth considering starting preparations for a skilled visa before the changes take effect. Whether you will still meet the requirements once the new settings are introduced is far from certain.

Overall, the planned changes are intended to align the system with current labour market needs and make Australia more attractive for skilled migrants. How these changes will be implemented in practice—and who will ultimately benefit or lose out in the competition for Australian work visas—remains to be seen.